Company No. 585467-M (Incorporated in

Transcription

Company No. 585467-M
(Incorporated in Malaysia)
Cover
Rationale
For our 2003 Annual Report we have chosen
the potter’s art as a metaphor for the Naim
Group’s property and construction activities.
In many ways our duties and responsibilities
are remarkably similar. The potter takes
simple formless and shapeless raw materials,
such as clay and mineral glazes, uses his or
her skill, give them shape and form, then
carves and decorates them, and fires them in
a white-hot kiln until they become items of
great quality and value.
Similarly, we at the Naim Group take simple
formless and shapeless raw materials such as
earth, concrete, tarmac and steel. We use our
skill and expertise to give them shape and
form. We embellish them with roofing, cables,
pipelines, windows, quality fittings and
finishes, and we fire them in the white heat of
modern construction technology, to create
vibrant living communities and key
infrastructure projects of indisputable quality
and value.
CORPORATE
STRUCTURE
Company No.585467-M
9
ORGANISATIONAL
STRUCTURE
Board of Directors
Board Executive
Committee
Remuneration/
Nomination Committee
Risk Management
Committee
Managing Director
/CEO
Management Committee
QA/QC Unit
Project Monitoring Unit
Investor Relations
Audit Committee
Secretarial/Legal/
Compliance
10
Company No.585467-M
Business Development
Division
Special Projects
& Land Admin Division
Business Development
Land Admin
Special Projects
Construction
Construction
Division
Quantity Surveyors
Equipment & Logistics
Chief Operating Officer
Property
Division
Property (Kuching)
Property (Miri)
Any Other Business
Division
Admin & IT
Division
Finance
Division
IT
Admin & HR
Finance
Internal Audit
11
CORPORATE
PROFILE
Naim Cendera Holdings Berhad is a company
listed on the Main Board of Bursa Malaysia.
The Company is the holding company for its 100%
owned subsidiary, Naim Cendera Sdn Bhd (NCSB),
which is primarily involved in property
development and construction in the state of
Sarawak, East Malaysia. NCSB was formed on 12
April 1993 and has been active in the property and
construction fields since September 1995.
NCSB is a Class A Bumiputera contractor with ISO
9002 certification, and has completed various
construction and development projects worth a total
of RM 910 million.
The Group has planned for future property
development projects with an estimated Gross
Development Value (GDV, see Note below) of
RM 2.753 billion, and has a construction order
book with an estimated total Contract Value (CV) of
almost RM1 billion.*
The Company was listed on the Main Board of Bursa
Malaysia on 12 September 2003, and has since
become one of Bursa Malaysia’s top ten property
and construction counters, and one of the top 100
counters overall, with a market capitalisation of
RM1.050 billion as of 30 January 2004.
* Including some projects at Letter of Intent (LOI) stage.
Note: All forecasts (GDV, CV etc.) included in this Annual
Report are based on assumptions which the Directors of the
Group believe to be reasonable. However all such
forecasts, and the assumptions on which they are based,
are subject to uncertainties and contingencies.
12
CHAIRMAN’S
STATEMENT
On behalf of the Board of Directors it gives me great pleasure to
present your Company’s Annual Report for the year ended
31 December 2003, our first as a public listed company.
Financial Performance
This has been an excellent year for the Naim Group.
For the year under review, on a proforma basis and
assuming the Group has been in existence for the
whole year in review as well as for the comparative
period (see Note I on page 15)), we registered an 11%
growth in revenue to RM270.951 million compared
with RM244.098 million last year. Profit before tax
rose 51.27% to RM77.99 million compared with
RM51.554 million last year, and profit attributable to
shareholders has grown by 52.69% from RM31.772
million to RM48.48 million. Earnings per share were
therefore RM0.194, against RM0.13 in 2002, based on
our paid-up capital of 250 million shares. These figures
exceeded our own pre-listing estimates by comfortable
margins – please see “Variation in Results” on page 55
for exact details.
These excellent results were largely due to increased
sales of homes at our two flagship developments,
Bandar Baru Permyjaya in Miri, and Desa Ilmu in Kota
Samarahan near Kuching, as well as increased activity
in our Construction Division.
...profit attributable to
shareholders has grown by
52.59% from RM31.772
million to RM48.48 million.
YBhg. Datuk Abdul Hamed Bin Sepawi
Non-Executive Chairman
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Company No.585467-M
The dynamic leadership of our Prime Minister, YAB Dato’ Seri Abdullah Haji Ahmad Badawi, and our Chief
Minister, YAB Pehin Sri Dr. Haji Abdul Taib Bin Mahmud, has strengthened our political stability to provide a
solid platform for the economic growth of the country.
Dividends
Economic and Political Factors
The Board is pleased to recommend a final dividend of
4.5 sen per share for the financial year ended
31 December 2003. Together with the interim
dividend already declared and paid, this represents a
total dividend of 9 sen per share, in line with the
forecast in our pre-listing prospectus.
The Group’s excellent performance was achieved
against less than ideal market conditions, given the
uncertainty caused by the regional SARS outbreak and
the invasion of Iraq by the United States and her allies.
However Sarawak’s rapidly developing economy once
again appeared to be immune from the financial
uncertainty affecting the rest of the region. This was
due partly to the sound economic policies of the State
Government, and partly to the RM7.3 billion financial
stimulus package announced by the Federal
Government in May 2003. Another reassuring factor
was the Prime Ministerial succession, which was
handled with great aplomb by both Tun Dr Mahathir
Mohamed and his successor, Datuk Seri Abdullah
Ahmad Badawi, as well as their Barisan Nasional
colleagues. This continued political stability helped to
ensure that markets for both residential and
commercial properties remained buoyant in Sarawak
throughout the year.
The dividend payment
represents a distribution
to shareholders of 33.39%
of the group’s net profits...
The dividend payment represents a distribution to
Shareholders of 33.39% of the group’s net profits for
the year ended 31 December 2003, and in the Board’s
opinion strikes an optimum balance between adequate
short-term financial benefits for our investors and the
maintenance of reasonable cash reserves for future
growth.
Note I:
The proforma figures indicated above are based on the assumption that Naim Cendera Holdings Berhad (NCHB) has owned Naim Cendera Sdn Bhd (NCSB)
for the year under review and for the comparative period since 1 January 2002, whilst the figures in the Audited Financial Statements included in this Annual
Report reflect the actual period of ownership from the takeover date of 25 July 2003.
15
CHAIRMAN’S STATEMENT
Winning of the MCIEA (CIDB) 2003 Award for the second consecutive year in Kuala Lumpur
Corporate Highlights
The past year has been something of an annus
mirabilis for the Naim Group, and it is difficult to
know where to begin when describing the year’s
achievements. However two events stand out amongst
many others, our winning of the CIDB award for the
second year in succession and our extremely
successful listing exercise and subsequent share
performance.
Trophy presented for
MCIEA (CIDB) Award 2003
Trophy presented for
CIDB Award 2002
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Company No.585467-M
CIDB Award 2003
To our great delight, we once again won the Malaysian
Construction Industry Excellence Award: Medium
Scale Building Project (awarded by the CIDB), this
time for the two schools we built at Bandar Baru
Permyjaya; SRK Merbau and SMK Merbau. I feel it is a
particularly noteworthy achievement that our Group
should win this most prestigious of awards for two
consecutive years. This is because we are still a
relatively young organisation, and we are not building
glamorous mega-projects in the Klang Valley, but
everyday practical educational buildings in Miri,
Sarawak. Therefore I take my hat off to the judges, for
taking the trouble to search for diamonds on the streets
of suburban Miri.
Winning this award is a very positive endorsement of
our overall quality strategy, and reflects very well on
both our housing developments and our construction
and civil works projects. We strive to attain the same
level of quality and value in the homes we build and
the infrastructure we create, and I am sure our house
buyers and institutional construction clients are
becoming increasingly aware of this fact.
Chairman, YBhg. Datuk Abdul Hamed Bin Sepawi and
Managing Director, YBhg. Datuk Hasmi Bin Hasnan
with the two awards.
...we once again won the Malaysian
Construction Industry Excellence Award:
Medium Scale Building Project...
Our CIDB 2002 & MCIEA 2003 award-winning projects - IKBN, SRK & SMK Merbau, Miri
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YBhg. Datuk Abdul Hamed Bin Sepawi hitting the ‘gong’ to officially
signal the public listing on Bursa Malaysia’s main board
Naim Cendera Holdings Berhad hit Bursa Malaysia’s main board for
the first time on 12 September 2003
Our Debut as a Listed Company
After a great deal of hard work by everybody concerned, Naim Cendera Holdings Berhad was listed on the Main
Board of Bursa Malaysia on 12 September 2003. Our confidence in going for listing was more than justified, as
the initial issue was 34 times oversubscribed and at the end of the first day’s trading our shares had achieved a
substantial premium of RM0.54 over an initial offer price of RM1.30, closing at RM1.84 on that day. However
this was only the beginning; our stock price rose steadily throughout the remainder of the year, buoyed by
excellent profit forecasts, and finished the year at a price of RM3.04.
Share Performance - Joining the Business Elite
The growth in value of our stock market capitalization
continued steadily into 2004, and on 29 January our
shares hit the RM4.00 mark, making us a billionringgit company years ahead of our most ambitious
expectations. It also placed us firmly in the Top 10 of
Malaysia’s property counters, and the Top 100 of
Malaysian listed companies overall – a surprising and
gratifying achievement for a provincial construction and
property firm that has only been trading since 1995.
...placed us firmly in the
Top 10 of Malaysia’s
property counters.
New Faces on the Board
During the year we were very pleased to welcome two old friends and Naim Group colleagues onto the Board
as Executive Directors. Mr William Wei How Sieng oversees Business Development and Special Projects, and
Mr Kueh Hoi Chuang heads our Property Division. Both gentlemen bring with them impressive career profiles
and impeccable leadership qualities, and it is a pleasure to work closely with them.
I would also like to welcome our three Independent Non-Executive Directors, YB Tuan Haji Hamden Bin Haji
Ahmad, a leading professional accountant, who is Senior Independent Non-Executive Director, and his
colleagues Ir. Abang Jemat Bin Abang Bujang, a widely respected professional engineer, and Dr. Sharifuddin Bin
Abdul Wahab, a prominent biotecnologist and CEO of a multinational company. In my humble opinion their
contribution is possibly the most important of all, as the duties and obligations of non-executive directors in the
modern business environment can often outweigh any rewards attached thereto. Thus our ability to attract three
prominent corporate figures of such excellent standing is a testament to the quality of our group and the
probity of its corporate governance.
18
Company No.585467-M
The signing of a Memorandum of Understanding
with Realmild Sdn Bhd in Kuala Lumpur witnessed
by YAB the Chief Minister of Sarawak.
YBhg. Datuk Abdul Hamed Bin Sepawi exchanging the Joint Venture Agreement with PPES Works (Sarawak) Sdn Bhd,
a subsidiary of Cahya Mata Sarawak Bhd.
Partnerships for Expansion Within and Beyond Sarawak
Given our excellent track record, the next logical step for the Group is to expand into property and construction
markets beyond Sarawak. However we are fully aware that this brings with it substantial risks as well as
potential benefits. Therefore we seek strong and dynamic partners with whom we can share those risks and
rewards. On 17 September 2003, during the gala dinner held to celebrate our stock exchange listing and our
winning of the CIDB award, we also announced the signing of a Memorandum of Understanding with Realmild
Sdn Bhd, to form a Joint Venture Company. This will enable us to jointly and collectively identify, explore
avenues, source, locate opportunities and to lobby, bid and tender for potential infrastructural projects
throughout Malaysia. During the year we also signed a Joint Venture agreement with PPES Works (Sarawak) Sdn
Bhd for the construction of the new Dewan Undangan Negeri Complex in Kuching.
Our Rapidly Expanding Order Book
Earlier in this message I used
During the last 12 months our Order Book
the term annus mirabilis, a
has almost doubled, and now stands at just
Latin phrase meaning “a year
of marvels.” Perhaps the
a few hundred Ringgit short of one billion.
greatest marvel of all is the
remarkable expansion of our Construction Division’s order book. In last year’s Annual Report our order book
stood at RM576.5 million. During the last 12 months it has almost doubled and, including some projects at the
Letter of Intent (LOI) stage, now stands at just a few hundred Ringgit short of one billion. This, more than
anything else, is the strongest testament to our performance, and to our commitment to quality and value for all
our customers.
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Corporate Governance
Good corporate governance has been a Naim
priority since the Group’s inception, and even as a
privately owned entity the Naim Group has adhered
to the highest standards of corporate governance.
This is clearly demonstrated by Naim Cendera Sdn
Bhd’s achievement in winning the Best Annual
Report (Non-Listed Category) in the Sarawak
Chamber of Commerce and Industry (SCCI)’s
Corporate Report Awards for its 2002 Annual
Report.
Naim Group has adhered to
the highest standards of
corporate governance.
Since its listing the Company is required to comply
with a new and much-expanded set of formal
requirements for good corporate governance.
However, the directors, managers and staff of the
Naim Group see these requirements not as an
added administrative burden, but as a valuable
opportunity to demonstrate that Naim Cendera
Holdings Berhad aspires to the highest standards of
transparency, accountability and good corporate
citizenship.
Investor Relations
In order to enhance corporate transparency and
good corporate governance as well as to maintain a
closer relationship with investors, Naim has
established an Investor Relations Department
headed by the Chief Executive Officer and overseen
by the Financial Controller, assisted by the Investor
Relations Officer and the Corporate Accountant.
This department provides the main line of
communication between the Company and its
investors. Meetings with analysts, fund managers
and investors are held regularly, including
attendance at forums organized by research houses
and road shows in Malaysia and overseas.
YBhg. Datuk Abdul Hamed Bin Sepawi and YBhg. Datuk Hasmi Bin Hasnan
receiving the SCCI Best Annual Report Award 2002
Naim Cendera Sdn Bhd
winning Annual Report 2002
Information is also disseminated via timely
announcements to Bursa Malaysia and to the media
as and when appropriate.
Trophy for SCCI Best Annual
Report Award 2003
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Company No.585467-M
Breakdown of Activities By Value (RM ‘000)
Estimated
Completed Projects On-Going Projects Future Projects
Property
Construction
453,019
457,888
796,171
999,923
1,957,790
N/A
Total
910,907
1,796,094
1,957,790
Naim Group looks forward with optimism and confidence as the sunrise beckons on the horizon
Looking Ahead
Acknowledgements
Based on the continued success of our housing projects
in Miri and Kota Samarahan, we are confident that we
can build on our capabilities and our reputation to
become one of Malaysia’s top home-builders and
developers in every market in which we operate.
Similarly, the widespread public and industry acclaim
for our completed construction activities, combined
with the smooth progress of our ongoing projects, leads
us to believe Naim Group can become the contractor
of choice for key public and private sector projects
throughout Sarawak and eventually throughout
Malaysia.
I would like to express my sincerest thanks to my
fellow directors and all employees of Naim Group for
their hard work, dedication and professionalism. I
would also like to thank those State and Federal
Government Ministries, Departments, Statutory Bodies
and Agencies who have offered us such close
co-operation throughout the year, and all the
Companies and Agencies that assisted in our
successful listing. Heartfelt thanks are also due to our
sub-contractors, consultants and service providers
whose hard work and professionalism has enabled our
Group to perform so well. However the warmest
thanks of all are due to you, our shareholders. It is your
committed support and your faith in our abilities
which have made us a Top 100 company just four
months after our initial listing.
Prospects for 2004 and Beyond
On the economic front, the continuing effects of the
RM7.3 billion financial stimulus package will ripple
through the economy, and the allocation of RM11.4
billion for infrastructure development in Sabah and
Sarawak in the 2004 Federal Budget will undoubtedly
have a positive impact for the Naim Group. The most
heartening news of all, however, is the massive
pro-government landslide in the recent general
election. This not only assures continued political
stability; it also provides the strongest possible
mandate for Datuk Seri Abdullah’s commitment to
transparency, probity and good governance. In this
new political and economic climate, the winners will
be the companies that offer the best quality and value
to their customers, and we are determined to be
amongst those winners.
Finally, I would like to offer a special word of thanks to
our customers, the various Government Departments
who have entrusted us with key public housing and
infrastructure projects. And last - but certainly not least
- our house buyers; thousands of ordinary Malaysians
who have not only contributed to our financial
success, but have also, together with their families,
transformed our development projects into living,
thriving communities.
Thank you
Datuk Abdul Hamed Bin Sepawi
21
MANAGING DIRECTOR’S
REVIEW OF OPERATIONS
On behalf of the Board of Directors, it gives me great pleasure to present the
Review of Operations for the financial year ending 31 December 2003. This
review also covers a number of operational aspects up to 31 March 2004.
Financial Performance
The year 2003 was indeed a gratifying year with our
revenue reaching a new record of RM270.951 million,
which is an increase of 11% from the previous year.
However the increase in profit after tax was a
remarkable 51.27%, to a record RM77.99 million. This
excellent result is attributed mainly to increased sales
of properties in both Miri and Kota Samarahan,
combined with a strong performance by our
Construction Division. Our Property Division
contributed 49.09% of our pre-tax profit, followed by
the Construction Division (46.3%) and the
Manufacturing and Trading Divisions (4.43%).
Increased operating efficiency further boosted the
overall profit.
Operational Review - Property
We have continued to sell large numbers of residential
properties at premium prices, a fact which we believe,
is largely attributable to our excellent reputation for
quality and value. This reputation has been earned
through hard work, painstaking research and planning,
and our willingness to listen to the needs and
aspirations of our customers.
YBhg. Datuk Hasmi Bin Hasnan
Managing Director and Chief Executive Officer
22
Increased operating
efficiency also boosted
the overall profit.
Company No.585467-M
Our flagship development, Bandar Baru Permyjaya in Miri
On the construction side we saw the completion of
868 units of various developments worth RM84.84
million. We also started work on a total of 735 new
properties during the year, continuing according to
schedule on Permy Technology Park, Prima Villa, Desa
Indah II & III, Desa Pujut 1 & 2, and Pusat Bandar
Permyjaya. Land clearing and preparation work
progressed smoothly and rapidly for the later phases of
the Permyjaya project.
Showhouses at Bandar Baru Permyjaya, Miri
Bandar Baru Permyjaya’s appeal to house buyers
seems to increase on an annual basis, and from
customer feedback we have learnt that the key factors
when making a purchase decision are Bandar Baru
Permyjaya’s perceived quality of construction and
value for money. Pleasant landscaping, provision of
top quality amenities and the operation of regular
security patrols were also significant factors for buyers.
Prior to launching of new products, we build show
units that become the benchmark for house buyers.
We undertake to make good any workmanship or
quality aspect of the purchaser’s property that does not
match that of the show unit. We feel that such a
warranty is not a burden on our Group, but an
excellent opportunity to show we are a caring
developer offering the best after-sales service in the
business.
Lotus showhouse at Prima Villa, Miri
Tulip Gold showhouse at Desa Pujut, Miri
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Another source of buyer goodwill is our record of
prompt completion. All Sales and Purchase Agreements
issued so far guarantee completion within two years,
but we make every effort to complete the properties
ahead of schedule, some by as much as one year.
The huge number of buyers we have attracted through
word-of-mouth are a testament to the value of our
consumer-friendly approach, and any extra expense
incurred is more than balanced by the goodwill
generated and the concomitant reduction in promotional
costs.
Demand for homes in Bandar Baru Permyjaya remained
strong in the first quarter of 2004, with 218 homes sold
at a value of RM28.742 million. During the coming year
a total of 12 new housing products will be launched,
offering comfortable and affordable homes and business
premises to a wide range of income groups.
Desa Ilmu
This was an excellent year for Desa Ilmu, the largest
integrated development in Kota Samarahan, Kuching’s
high-tech satellite town. Like its Miri counterpart, Desa
Ilmu also performed above expectations, with a total of
460 units sold in 2003 for a value of RM88.204 million.
On the construction side a total of 118 units worth
RM35.467 million were completed, and we started
work on a total of 723 new properties worth RM113.91
million during the year. Ground works and site
preparation continued for the subsequent phases, which
are scheduled for completion over the next four years.
Desa Ilmu’s increasing appeal seems to be influenced
by a number of factors. Quality and value for money are
again the key reasons; when we asked for satisfied
customers to appear in a promotional video for the
development, we were faced with more volunteers than
we could possibly handle, and quality and value were
uppermost in their minds. Location is another
significant factor; although it lies outside Kuching’s city
limits, Desa Ilmu is in fact far closer to the city centre
than many housing developments within Kuching, and
is also 5 minutes away from Sarawak’s two largest
universities and 10 minutes from the Sama Jaya Free
Industrial Zone.
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Desa Ilmu also performed
above expectations, ...Quality
and value for money are again
the key reasons...
Shophouses at Bandar Baru Permyjaya, Miri
Briefing and site inspection by Managing Director at Desa Ilmu
Company No.585467-M
Another factor contributing to Desa Ilmu’s improved performance is the setting up of a dedicated sales office on
the ground floor of our corporate headquarters, Wisma Naim. The sales office not only offers improved access,
comfort and convenience to our prospective buyers, it also overlooks one of Kuching’s busiest traffic
intersections, and the promotional materials on display are easily seen by passing motorists.
Warranty repairs were similar in extent to those in Bandar Baru Permyjaya, and served to generate a similar
amount of customer goodwill. Completion dates were also consistently ahead of schedule and up to one year
early. For the first quarter of 2004, Desa Ilmu performed exceptionally well, with 253 homes being sold for a
total value of RM39.169 million. If this trend continues we should exceed the 2004 target of 695 homes at
RM115.27 million by a wide margin.
Aritst’s impression of proposed commercial building in central Kuching
Future Property Activities
We have recently received planning permission for a 2.4 acre commercial development in central Kuching. We
will commence work on this project, comprising 40 shophouses and a larger retail outlet for an anchor tenant,
later in the year. When complete in 2006 it will have an estimated GDV of RM28.473 million. In addition, two
high-end residential developments in central Kuching are at the planning stage, and the group has recently
secured two large packages of development land, with a combined area of 350 acres, in key suburban areas of
Kuching. This new land is expected to generate revenue exceeding RM450 million.
Operational Review – Construction
...the dramatic expansion of
Construction is playing an increasingly important
role in the Naim Group’s activities, as seen from its
our order book to almost
increased contribution to the Group’s profits in 2003,
one billion Ringgit.
now standing at RM125.43 million, or 46.3%. It is set
to play an even greater role in the future, given the
dramatic expansion of our order book to almost one billion Ringgit. We attribute these new orders to our track
record of first class quality and early completion, which we achieve by setting aggressive yet entirely realistic
completion targets, and employing excellent hands-on managers and supervisory staff. Details of some of our
key construction projects are set out below.
25
Projects Completed in 2003
SMK and SRK Merbau in Bandar Baru Permyjaya
SMK Merbau, Miri.
I am proud to say that this project, combining two
schools in one compound, won us the coveted
CIDB award for the second year running. Further
details of our remarkable achievement can be
found in the preceding Chairman’s Message and
in “CIDB Award 2003” on page 17 of this Annual
Report. I would simply like to add that this
RM47.76 million project was also completed
almost 2 months ahead of schedule in January
2003, and that we have received numerous
plaudits for the quality of the design of both
schools. I am confident the quality of these
schools, and the quality of our previous award
winner - the Institut Kemahiran Belia Negara,
Miri - will lead to increased business from the
education sector, both public and private.
SMK and SRK Merbau, Miri are the
winning projects of MCIEA 2003
(CIDB) Award.
SRK Merbau, Miri.
Ongoing Projects
Over RM300 million worth of projects
are currently under way, and I am
pleased to say all are on target for early
or timely completion, reinforcing our
track record as a contractor who always
delivers. The broad range of jobs we are
working on also highlights our capacity
to tackle almost every aspect of
infrastructure provision, and bodes well
for our future prospects as an integrated
construction solutions provider.
Aerial view of Go Kart Racing Track.
26
Company No.585467-M
During the coming year we expect to complete and hand
over a number of projects with a combined value of
approximately RM129 million. Two of these projects, the
International Go Kart Racing Track in Miri and the
Balingian – Kuala Balingian – Kuala Tatau – Bintulu Road
are virtually complete at the time of writing. The
Upgrading of the Sibu-Bintulu Road (Package 1) is
progressing well ahead of schedule and is slated for early
completion during the year. The early completion of the
Curtin University Access Road in Miri will bring particular
synergy to the Group’s property business, as Bandar Baru
Permyjaya will become the residence of choice for
academic staff, students, and families with children
aspiring to top class tertiary education.
The Upgrading of the Sibu-Bintulu Road (Package 2)
presents us with one of our greatest technical challenges the 453 metre bridge across the Batang Kemena.
To minimise disruption of river traffic and speed up the
construction process, we have chosen a technology only
occasionally used in Southeast Asia. Together with our
technology partners, pre-stressing specialists VSL of
Singapore, we are constructing the bridge using the
Incremental Launching Method (ILM). With this unique
technology, the bridge is constructed entirely on land and
launched out across the river incrementally in 20-metre
stages. As well as offering one of the most dramatic and
imposing sights in the construction industry, this advanced
technology has helped to put us well ahead of schedule
and we are confident of completing the entire project 3
months ahead of the contractual completion date, which
is May 2005.
Sibu-Bintulu Road (Package 1)
Sibu-Bintulu Road (Package 2)
The upgrading of 456-meter Kemena Bridge in Bintulu – one of the most dramatic and imposing sights in the construction industry
27
Site visit by YB Tan Sri Datuk Amar Dr. George Chan to Kolej Sains Kesihatan Bersekutu, Kuching
The Kolej Sains Kesihatan Bersekutu, at Penrissen near
Kuching is set to transform healthcare education in
Sarawak and is currently proceeding ahead of
schedule. Zones 1 and 2 should be finished by May
2004 and the final Zone 3 finished by December
2004, against a revised contractual completion date of
April 2005. Another significant contribution to public
health, the Water Pipelines for Rural Areas – Package
3, is being carried out under the Ministry of Rural
Development umbrella scheme to groom and upgrade
small bumiputera contractors (see article on page 67 of
this Annual Report). I am pleased to report that these
small bumiputera contractors are responding very
positively to our aggressive, hands-on approach to
project management, and we are on schedule to
complete well before the contractual completion date
of December 2004.
...bumiputera contractors are
responding very positively to our
aggressive, hands on approach to
project management,
28
Rural project
Company No.585467-M
Other Projects
Including projects at Letter of Intent (LOI) stage,
contracts in the pipeline have a combined value of
RM600 million. They present major technical
challenges, and exceptional business opportunities, for
differing reasons. Most notable is the prestigious new
Dewan Undangan Negeri Complex, the future seat of
Sarawak’s State Government, to be carried out in a
45/55 joint venture with PPES Works (Sarawak) Sdn
Bhd, a Subsidiary of Cahya Mata Sarawak Berhad.
Other planned projects include the Institut Latihan
Perindustrian Miri, which will add even more value to
Bandar Baru Permyjaya as a location for educational
excellence; the Road and Bridge over Batang
Balingian, which will release the economic potential
of Central Sarawak’s coastal heartland; the Upgrading
of the Sibu-Mukah Road, providing easier access to
one of Sarawak’s fastest-growing regions; and the
Upgrading of the Sibu-Julau Road, a major step
towards developing Central Sarawak’s rural
infrastructure.
Artist’s impression of proposed new Dewan Undangan Negeri, Sarawak
29
Operational Review
- Manufacturing & Trading Divisions
Although not major contributors to the Group’s profits,
the Manufacturing and Trading Divisions are an
important asset, producing concrete, cement blocks
and RC piles, and trading in steel bars, wire mesh, tiles
and cement. They provide valuable synergy with other
group activities, ensuring timely supply, reducing
procurement cost of materials and generating useful
third party income. They more than proved their worth
during 2003, helping us to overcome a major
business obstacle; the worldwide shortage of steel.
While other builders and developers were severely
affected by the international shortage of construction
grade steel-driven by rapid infrastructure development
in China - we were able to
operate smoothly, thanks
to our extensive steel
stockholdings
and
our
established lines of supply.
We were also spared some of
the impact of the increase in
steel prices, because of
prudent estimating from our
quantity
surveyors
and
excellent market intelligence
from our trading arm.
Quality - Our Top Priority
Quality is a crucial component of our business, as our
two consecutive CIDB Best Contractor awards have
shown. However our commitment to quality goes
much further than simply paying lip service to
standards and procedures. We are probably the only
player in our sector with an executive director whose
primary duty is to oversee Quality Assurance and
Quality Control (QA/QC) activities, monitoring and
developing every aspect of the Group’s quality on an
almost daily basis. We firmly believe in our
commitment to quality because reliable customer
feedback tells us that quality and value are the
principal factors contributing to our market leadership
in Sarawak. For further details of our quality activities
please see page 68 of this Annual Report.
30
Safety First At Naim
Safety is of overriding concern to the directors,
management and staff of Naim. We implement a Zero
Accident Policy in every area of the Group’s activities,
tolerate no deviation from safety procedures, and
take all possible precautions to prevent adverse safety
outcomes in any of our projects. In our opinion even
one accident is an accident too many, and thankfully
our diligence has once again resulted in zero accidents
for the year in review.
An excellent example of the lengths to which we go to
ensure safety is the ILM bridge over Batang Kemena.
The Kemena River is a busy waterway, with more
than 40 heavily-laden, unmanoeuvrable timber barges
plying its waters daily. Although launched from dry
land, the ILM bridge requires ten piers to support it,
four of which must be set in the river bed. This
presents a considerable safety challenge, both for our
construction staff and for the barge crews and other
river users.
Before any construction work began, Naim set up
dialogue sesions with boat owners and crews, local
communities and other river users, to get their
feedback and suggestions on safety issues. As a result
we implemented a comprehensive package of safety
measures, including brilliant floodlighting of the
bridge 24 hours a day to overcome poor visibility, and
extensive positioning of warning lights and signs along
the river approaches to the bridge. Thanks to these
measures and the generous cooperation of river users
and the local community, the project has so far
proceeded without any safety incidents.
Company No.585467-M
Information Technology
For a number of years the Naim Group has been steadily increasing
its investment in information technology, to the extent that all staff
who possibly require it now have access to a computer at their
workplace, and full training in basic computer productivity skills.
During the year we also integrated the group’s various locations,
with a Wide Area Network serving Miri and our Kuching operations.
Another important IT milestone was the launching of our revised and
updated website, www.naimcendera.com. The website contains
extensive information about the Group’s activities, an investor
relations section, details of job opportunities, and an online
catalogue of homes at Bandar Baru Permyjaya and Desa Ilmu.
Updated website www.naimcendera.com
During the year we also took the decision to increase our IT spending and devised a five-year plan with a RM2.4
million budget to integrate all Group operations into an integrated business management system. After detailed
examination of a considerable number of proposals, we are delighted to announce that we have chosen an
entirely Malaysian system, IFCA Property Plus, which in our opinion is the best product on the market for a
company in our line of business.
IFCA Property Plus gives us highly flexible hardware and software solutions for every aspect of our business.
IFCA Project enables us to track our projects and provides a database for our costs, IFCA Developer integrates
our property marketing functions at every level, IFCA Tenancy manages leases with little human intervention,
and IFCA Financials gives us powerful financial management and analysis tools. And most importantly of all, all
four software components are fully integrated, giving the Board and senior managers a minute-by-minute
overview of our entire operation.
Future Outlook
The year 2004 and the years beyond present many exciting opportunities for the Naim Group as we enter a new
phase of growth and increased profitability.
Our Property Division is expected to perform increasingly well, whilst our Construction Division has a
substantial order book and a number of major projects scheduled for completion. The outlook for the property
and construction sectors in Sarawak is excellent, an assertion that is more than substantiated by the
independent observers detailed in Appendices 1 and 2 of this Anuual Report.
Our ongoing development projects at Bandar Baru Permyjaya and Desa Ilmu continue to progress, with
residential and commercial properties with an estimated GDV of RM1.8 billion (Miri) and RM444 million (Kota
Samarahan) awaiting completion beyond 2008.
In the coming year we will be starting work on a 2.4 acre commercial complex in the heart of Kuching, and we
are also planning two exclusive residential developments in high-end neighbourhoods close to the heart of the
city. Most importantly of all, we have very recently secured two prime packages of development land totalling
350 acres, situated directly adjacent to two of Kuching’s major feeder arteries. This valuable addition to our land
bank will enable us to increase our market leadership in Sarawak, and become the first-choice developer not
only in Miri, but also in the State Capital. Finally, our 1,000 acre land bank at Kemena, on the fringes of
booming Bintulu, offers prospects for growth and expansion throughout the second decade of this century.
31
YBhg. Datuk Hasmi Bin Hasnan in discussion
with a group of prospective foreign partners
The construction arm has an order book with an estimated total value of very nearly RM1 billion, including
projects at the Letter of Intent stage, which will contribute positively to the group’s earnings for the next four
years, whilst new projects are actively being sought to boost our earnings over the longer term. The contract to
build the new Dewan Undangan Negeri Sarawak as a joint venture will not only bring valuable revenue to the
group. It will also give us our first opportunity to work on a prestige project that is very much in the public eye,
and should help to make the Naim Group a household name throughout the Malaysian construction sector and
beyond.
We are confident our developments will continue to attract a steady flow of buyers willing to pay premium
prices, because we have established a reputation in the market place for quality, customer care and after sales
service that is second to none in Malaysia. Similarly, we believe the construction arm will go from strength to
strength because of its track record of high quality work and timely completion.
One particular objective of ours during the coming year is to communicate these pleasing facts more
effectively to the business community and the public at large, and to this end we now have fully operational
Public Relations and Investor Relations Departments.
With thousands of comfortable and affordable homes to be
launched and over a billion Ringgit worth of construction
projects under way or in the pipeline, our prospects for
2004 and beyond look very promising indeed. Therefore
the Board of Directors will do their utmost to ensure that
the Naim Group makes the most of every opportunity, and
continues to work hard to deliver increasing value and
excellent performance to all our stakeholders.
Datuk Hasmi Bin Hasnan
Managing Director and Chief Executive Officer
32
...our prospects for 2004 and
beyond look very promising
indeed.
Company No.585467-M
The construction arm has
an order book with an
estimated total value of very
nearly RM1 billion, which will
contribute positively to the
group’s earnings for the next
four years,
33
BOARD OF
DIRECTORS
Chairman
Datuk Abdul Hamed Bin Sepawi, a Malaysian citizen aged 55,
was appointed as Non-Executive Chairman of Naim Cendera
Holdings Berhad on 25 July 2003. Prior to the Naim Group’s
listing he was Non-Executive Chairman of Naim Cendera Sdn
Bhd (since 12 October 1995). He received his early
education at St. Columba’s School, Miri and Malay College,
Kuala Kangsar.
He graduated with a BSc (Hons) from
University of Malaya in 1971, pursued undergraduate studies in
forestry at the Australia Nation University from 1974 to 1975,
Non-Executive Chairman Datuk Abdul Hamed Bin Sepawi
Chairman Board Executive Committee
and Nomination Committee
and later obtained an MSc in Forest Products from Oregon State
University, USA.
Whilst remaining active in the timber and plantation industries,
Datuk Abdul Hamed developed his career around his keen
personal interest in the construction sector, which was first
acquired through school vacation jobs in Miri. For more than
26 years, he has been active as an investor, a manager and a
director in companies carrying out civil works, offshore
engineering, construction, housing, and property development.
He was a member of the National Economic Consultative
Council II and was awarded the title of Panglima Gemilang
Bintang Kenyalang on 11 September 1999.
He sits on the
board of Sarawak Timber Industry Development Corporation, a
state statutory body in Sarawak.
He is also the Executive
Chairman of Ta Ann Holdings Berhad, a company listed on the
main board of Bursa Malaysia.
34
Company No.585467-M
Managing
Director
& CEO
Datuk Hasmi Bin Hasnan, a Malaysian citizen aged 51, is the
founder of Naim Cendera Sdn. Bhd., a wholly-owned
subsidiary of Naim Cendera Holdings Berhad. He was
Managing Director and Chief Executive
Officer Datuk Hasmi Bin Hasnan
appointed Director of Naim Cendera Holdings Berhad on 25
July 2003. He graduated with a BSc in Estate Management
from the University of South Bank, London, UK in 1978. He is
a member of the Malaysia Institution of Surveyors, Senior
Certified Valuer with International Real Estate Institute, USA
and a member of FIABCI (a Paris-based worldwide network for
professionals involved with the property industry).
ChairmanRisk Management Committee
Member Board Executive Committee,
Remuneration Committee and
Audit Committee
He began his career in 1979 as a valuer in the Land and Survey
Department of Sarawak. Since 1982, he has been involved in
a wide range of businesses, including valuation, project
management, property development and management,
construction, timber, manufacturing, trading and publishing. In
June 1993 he became the Managing Director of Naim Cendera
Sdn. Bhd. and has since been the main driving force behind the
company’s growth and expansion. He was awarded the title of
Panglima Gemilang Bintang Kenyalang on 9th September 2000
35
BOARD OF DIRECTORS
Executive Director, Construction and
Chief Operating Officer Ir. Suyanto Bin Osman
Member – Board Executive Committee and Risk
Executive Director and Head of Business
Development Iand Special Projects William Wei How Sieng
Member – Risk Management Committee
Mr. William Wei How Sieng, a Malaysian citizen
Ir. Suyanto Bin Osman, a Malaysian citizen aged 46,
aged 53, was appointed Executive Director of Naim
was appointed Executive Director of Naim Cendera
Cendera Holdings Berhad on 25 July 2003,
Holdings Berhad on 25 July 2003 and he is
responsible for business development and special
currently overseeing the overall operations of the
projects. He holds a Diploma in Education (1979) a
Group. He holds a BSc in Civil Engineering from the
Diploma in Business Studies (1983) a Bachelor of
University of Manchester Institute of Science &
Business Management (University of Melbourne,
Technology, UK. He is a registered Professional
1990) and an MBA from St Clement’s University UK,
Engineer with the Board of Engineers, Malaysia and
majoring in Project Management in Construction.
also a member of the Institution of Engineers
He is a Malaysian Certified Company Secretary and
Malaysia and the Project Management Institute (PMI).
a member of the Malaysian Institute of Chartered
Secretaries and Administrators (“ICSA”) and the
He started his career as an Engineer with the Public
Malaysian Association of Company Secretaries
Works Department from 1981 to 1987. In 1988, he
(MACS), for whom he was recently elected as
joined Dewan Bandaraya Kuching Utara (DBKU) as
Sarawak Representative.
Deputy Director where he was responsible for the
overall control of the planning and development of
He began his career as a Headmaster in the State
Kuching City, Sarawak. He later joined HAPM
Education Department. From 1977 onwards he
Consultant in 1995 as Executive Director where he
ventured into a wide range of businesses including
was the Project Director of various mega-projects
newspaper publication, management, property
including the 77 Storey Headquarters Building of
development, property management, construction,
Telekom Malaysia (RM700 million), the Bakun
manufacturing and trading.
Resettlement Scheme (RM300 million), Multimedia
University
Cyberjaya
(RM350
million)
and
University Malaysia Sarawak (RM1 billion). He
joined wholly owned subsidiary Naim Cendera Sdn.
Bhd. in April 2003.
36
Company No.585467-M
Executive Director and Head of Properties Kueh Hoi Chuang
Member – Risk Management Committee
Mr Kueh Hoi Chuang, a Malaysian citizen aged 48,
was appointed Executive Director of Naim Cendera
Holdings Berhad on 25 July 2003. He holds a
Bachelor of Arts degree from the University of
Guelph, Canada, and is a member of the Alliance of
Approved Company Secretaries.
Mr Kueh has been involved in the property and
construction industry since his graduation in 1983.
He was initially employed by Custodev Sdn. Bhd.,
where he specialized property management,
development and construction. He joined wholly
owned subsidiary Naim Cendera Sdn. Bhd in 1993
and rapidly rose through the ranks. He currently
heads the Naim Group’s property division,
responsible for the development of the group’s
flagship projects at Bandar Baru Permyjaya, Miri,
and Desa Ilmu, Kota Samarahan. He also has
extensive sales and marketing experience in
properties developed under his leadership.
Executive Director and Head of Business
Development I - Abang Hasni Bin Abang Hasnan
Abang Hasni Bin Abang Hasnan, a Malaysian
citizen aged 53, was appointed Executive Director of
Naim Cendera Holdings Berhad on 25 July 2003. He
is in-charge of the Quality Assurance/Quality Control
(QA/QC) of the Group’s projects, and also oversees
the Business Development Division. He received his
early education in Government Secondary School,
Kanowit and later pursued studies in carpentry and
joinery and obtained a Certificate from City & Guilds
of London Institute. In 1972 he attended a technical
course in wood processing and mechanical and
engineering equipment at British Columbia Institute
of Technology, Canada.
From 1967 to 1983 he worked as an Instructor to the
Forest Department, Kuching. From 1983 to 1988 he
joined Equatorial Timber Moulding Sdn. Bhd. as
Assistant Factory Manager. Thereafter he continued to
be involved in timber related business when he joined
Gegasan Sdn. Bhd. as Production and Research &
Development Manager. He joined Naim Cendera
Sdn. Bhd., in January 1997 and was gradually
promoted to Executive Director overseeing the
business development and QA/QC projects of the
Group.
37
BOARD OF DIRECTORS
Senior Independent Non-Executive Director YB Tuan Haji Hamden Bin Haji Ahmad
Chairman - Audit Committee
Member - Nomination Committee &
Risk Management Committee
Independent Non-Executive Director Ir. Abang Jemat Bin Abang Bujang
Chairman - Remuneration Committee
Member - Nomination Committee
Committee
YB Tuan Haji Hamden Bin Haji Ahmad, a Malaysian
Ir. Abang Jemat Bin Abang Bujang, a Malaysian
citizen aged 55, was appointed Independent
Non-Executive Director on 25 July 2003. He is a
Non-Executive Director on 25 July 2003. He holds
Chartered Accountant by profession and obtained
a Bachelor of Engineering (Electrical) from
his membership of the Association of Chartered
Newcastle University, NSW, Australia. He is a
Certified Accountants (ACCA) from the London
registered Professional Engineer with Board of
School of Accountancy, United Kingdom in 1979.
Engineers, Malaysia and also a member of the
He is a Fellow of the ACCA.
Institution of Engineers, Malaysia. He was awarded
&
Audit
the Pingat Perkhidmatan Bakti (PPB) in 1997.
He started his career as a Chief Accountant with the
Sarawak Land Development Board from 1978 to
He joined Telekom Department Sarawak as a
1982. He later set up his own accounting firm,
Telecommunications Engineer from 1979 to 1986
Hamden Kiu dan Rakan Rakan in 1983. He is
and assumed the post of Director in 1987 to 1990.
currently an elected member of Dewan Undangan
He was the General Manager of Telekom Malaysia
Negeri and holds directorships in several private
from 1995 to 1999. He joined TM Cellular Sdn.
limited companies.
Bhd. as Chief Executive Officer from 1999 to 2000
and he is currently the Chief Executive Officer of
Sacofa Sdn. Bhd.
38
Company No.585467-M
Independent Non-Executive Director Dr. Sharifuddin Bin Abdul Wahab
Member – Remuneration Committee
Dr. Sharifuddin Bin Abdul Wahab, a Malaysian
Non-Executive Director on 25 July 2003. He holds
a Doctor of Veterinary Medicine degree from the
University of Agriculture, Faisalabad, Pakistan (1981)
and an MSc from Universiti Pertanian Malaysia
(1983). He also holds a certificate in RIA techniques
from Cornell University, United States of America.
He began his career as a lecturer in Universiti
Pertanian Malaysia in 1982 and was active in various
research and development activities. He was
awarded research grants from the International
Atomic
Energy
Agency
(IAEA)
Vienna,
Commonwealth Scientific and Industrial Research
Organisation (CSIRO) Australia and later appointed
as expert for Africa and South East Asia by the IAEA.
In 1989, he joined Schmidt Scientific Sdn. Bhd. and
successfully restructured the Biomedical business in
Malaysia. He was Executive Director of Schmidt
Vietnam Co Ltd from 1995 – 1998. He became
Regional Managing Director in 1999 and is
currently the Chief Executive Officer of Schmidt
BioMedTech Asia Ltd., a multinational company with
presence in over ten countries in Asia. He also holds
directorships in several private limited companies.
Except for Abang Hasni Bin Abang Hasnan, who is
the brother of Datuk Hasmi Bin Hasnan, none of
the directors have any family relationship with any
director and/or major shareholder, nor any conflict
of interest with the Company. The directors have
no convictions for any offences. All directors
attended all the board meetings held during the
financial year under review.
39
MANAGEMENT TEAM
Left to Right
front row
:
second row :
Hii Doh Yew, Samat Bin Othman, Abang Hasni Bin Abang Hasnan, Ir. Suyanto Bin Osman,
Datuk Hasmi Bin Hasnan, William Wei How Sieng, Yee Siew Peng, Lee Ay Choo,
Bong Siu Lian
Kueh Hoi Chuang, Kho Teck Hock , Charles Bateman, Ir. Chong Boon Kuet,
Abdul Rahman Bin Abdul Rahim, Leong Chin Chiew, Zailani Bin Ismail, Kembi ak Rigong
Management
Team
40
SENIOR
MANAGEMENT
Company No.585467-M
Head of Corporate Finance - Kho Teck Hock
Kho Teck Hock, aged 48, holds a Bachelor of Commerce (Accountancy) from
the University of Otago, New Zealand. He is a registered Associated Chartered
Accountant with the New Zealand Institute of Chartered Accountants and is a
member of the Malaysian Institute of Accountants. His working experience of
more than 23 years includes holding the position of Accountant and Company
Secretary in Sarawak Motor Industries Berhad and Advance Finance Berhad.
He joined Naim Cendera Sdn Bhd (NCSB) on 15 February 1997 as Accounts
Manager and was later promoted to head the Finance Department. He is
responsible for the overall financial operations, financial planning and
accounting as well as the company’s secretarial functions. He advises the
Board of Directors on the optimal management of cash flow, credit instrument
and investment options.
Accountant (Group Subsidiaries) – Kembi ak Rigong
Kembi ak Rigong, aged 37, is the Accountant responsible for the accounting
functions of the Group’s subsidiary companies. He obtained his membership
of the Association of Chartered Certified Accountants (ACCA) in 1996 and is a
member of the Malaysian Institute of Accountants. He was attached to a local
public accounting firm as an Audit Senior for approximately six years before
joining NCSB in April 2002.
Internal Auditor – Affendi Sapiie
Affendi Sapiie, aged 40 is the Group’s Internal Auditor. He holds a bachelor’s
degree in Accountancy and Masters in Business Administration from Institut
Teknologi Mara and is a member of the Malaysian Institute of Accountants. He
worked for Sarawak Timber Industry Development Corporation for more than
11 years as an accountant before joining NCSB in January 2004 as Group
Internal Auditor.
41
SENIOR MANAGEMENT
Head of Infrastructure and Works – Leong Chin Chiew
Leong Chin Chiew, aged 42, is the Head of Construction and is
currently in charge of all construction projects, including project management,
project planning and controlling, site management, tendering and project
execution. He holds a Bachelor of Applied Science degree majoring in
Quantity Surveying from Curtin University of Technology, Western Australia
(1988). He is a registered Quantity Surveyor with the Board of Quantity
Surveyors, Malaysia and also a Member of the Institute of Surveyors, Malaysia.
He joined Contract Services Consultants, a Quantity Surveying firm as
Quantity Surveyor from 1988 to 1990. In 1990 he moved to Shinsung
Corporation (Construction), a Korean construction firm, as Project Quantity
Surveyor. Thereafter, he joined NCSB in March 1995. During the past sixteen
(16) years, he has gained extensive experience in the construction industry and
was involved in many projects in Sarawak.
Project Director (Naim Citra Sdn Bhd) - Zailani Bin Ismail
Zailani Bin Ismail, aged 41, is Project Director of Naim Citra Sdn Bhd,
responsible for the supply and installation of ductile iron pipes and fittings for
rural water supply projects in Sarawak. These projects are carried out under a
Government Umbrella Scheme to develop bumiputera entrepreneurs, and
he is also responsible for supervising and mentoring these class D-F
bumiputera contractors.
He holds a BSc in Electrical Engineering from the University of Iowa, USA
(1985). From 1985 to 1993 he held various positions with the Sarawak
Electricity Supply Corporation (SESCo) working on Rural Electrification,
System Development, and Corporate Planning, and rising to Senior Engineer.
From 1988 to 1989 he was also attached to the Energy Section of Economic
Planning Unit in the Prime Minister’s Department as Assistant Director. He
later moved on to Time Engineering Berhad as Branch Manger, Kuching from
1993 to 1994. In 1994, he joined Shorefield Sdn Bhd as Director in charge of
the planning for the Sarawak rural electrification scheme. He joined NCSB in
September 2001.
42
Company No.585467-M
Senior Business Development Manager - Abdul Rahman Bin Abdul Rahim
Abdul Rahman Bin Abdul Rahim, aged 46, is the Group’s Business
Development Manager. He holds a BSc in Business Administration from
the United States International University, San Diego and obtained his
MSc from Universiti Sains Malaysia, Penang in 1989.
He was attached to the Sarawak Housing and Development Commission
for more than 20 years and held various positions including Project
Manager, Human Resource Manager, Executive Officer and secretary to
the Board. He was also appointed as Managing Director of Mutiara
Perumahan Sdn Bhd, a wholly owned subsidiary of Sarawak Housing and
Development Commission where he was involved in the development of
low cost housing projects valued from RM3.2 million to RM31 million. He
joined NCSB in January 2002 and his primary responsibilities are to
explore new investment and business opportunities, and to support the
Group’s investment strategies and business direction.
Senior General Manager, Land Administration – Charles Bateman
Charles Bateman, aged 56, is the Senior General Manager, Land
Administration of NCSB. He is an Associate of the Royal Institution of
Chartered Surveyors, a member of the Institution of Surveyors Malaysia
and a registered Valuer and Estate Agent with the Board of Valuers,
Appraisers and Estate Agents of Malaysia. He was awarded the Pingat
Perkhidmatan Bakti (PPB) in 1990, Pingat Perkhidmatan Cemerlang (PPC)
in 2000 and bestowed the Pingat Setia in 1997.
He joined the Land and Survey Department in 1969 and retired on 31
December 2002. During his distinguished career with the Land and
Survey Department he held a variety of key positions throughout Sarawak,
acquiring an unmatched knowledge of land administration in the state. In
1984 he was put in charge of valuation matters for the State of Sarawak,
and subsequently served as Superintendent of Land & Survey, firstly in Sri
Aman Division and subsequently in Miri and Kuching divisions. He joined
NCSB in January 2003 and is in overall charge of the Group’s land
administration functions. He is also a Director in one private limited
company.
43
AUDIT COMMITTEE
MEMBERSHIP & REPORT
Left to Right:
YB Tuan Haji Hamden Bin Haji Ahmad
Ir. Abang Jemat Bin Abang Bujang
Memberships
The Audit Committee was established on 25 July 2003 and comprises the following:YB Tuan Haji Hamden Bin Haji Ahmad – Chairman
Senior Independent Non-Executive Director
Datuk Hasmi Bin Hasnan – Member
Managing Director & Chief Executive Officer
Ir. Abang Jemat Bin Abang Bujang – Member
Independent Non-Executive Director
The composition of the Audit Committee is as follows:Category
Executive Director
Total
No. of directors
Percentage
2
1
____
3
===
66.66%
33.33%
_________
100.00%
=======
Attendance at the Audit Committee Meeting
The Audit Committee met once (1) during the year 2003 and the attendance of each member is as follows:Audit Committee Members
44
No. of
Meetings Attended
Percentage
1/1
100
1/1
100
1/1
100
Company No.585467-M
Activities of the Audit Committee
The activities of the Audit Committee during the financial year under review were as follows:i) Formalize the Audit Committiee’s Terms of Reference.
ii) Interview, select and recommend for appointment an Internal Auditor;
iii) Review the results for the quarter ended 30 September 2003, propose changes thereto and recommend
for Board’s approval;
iv) Review related party transactions;
v) Review the Authority Limits; and
vi) Review the Accounting Policy.
Recognizing the significance of financial reporting for investors to evaluate their investment objectives, the
Audit Committee has provided and will continue to endeavor to provide information about the economic
resources of the Naim Group, the claims to those resources and the effects of transactions.
Functions of the Internal Audit Department
The Company recruited an Internal Auditor to head the Internal Audit Department. In order to enhance the
independence and objectivity of the Internal Audit Department, the Internal Auditor reports directly to the Audit
Committee.
The functions of the Internal Audit Department as approved by the Audit Committee are as follows:a) Evaluate procedures in place to safeguard company assets;
b) Provide assurance on compliance with the Group’s Procedures and Authorities, appropriate laws and
ethics;
c) Assist management in the deterrence and reporting of fraud;
d) Recommend appropriate controls to overcome deficiencies and to enhance company operations; and
e) Analyze and examine that operations are effective and resources are efficiently used.
Reporting Structure
The Audit Committee reports directly to the Board. The Audit Committee membership comprises a majority of
independent non-executive directors, independent of the management, and provides an objective appraisal of
the management accounting and auditing performance of the Naim Group.
45
AUDIT COMMITTEE
MEMBERSHIP & REPORT
TERMS OF REFERENCE
The Terms of Reference for the Audit Committee are as follows:Objectives
The objectives of the Audit Committee are to:a) provide assistance to the Board in fulfilling its fiduciary responsibilities, particularly in the areas of internal
control systems and financial reporting;
b) provide meetings and communication between non-Executive directors, the internal auditors, the external
auditors and the management to exchange views and information, as well as to confirm their respective
authority and responsibilities;
c) undertake such additional duties as may be appropriate to assist the Board in carrying out its duties.
Composition
The Audit Committee shall be appointed by the Board from among their number and shall comprise no fewer
than three (3) members, where the majority shall be independent Directors. At least 1 member must be a MIA
member.
- 2 Independent Non-Executive Directors; and
- 1 Executive Director
If a member of the Audit Committee resigns, dies, or for any other reason ceases to be a member with the result
that the number of members is reduced below 3, the Board shall within 3 months of the event, appoint such
number of new members as may be required to fill the vacancies.
Authority
The Audit Committee shall have:a) the authority to investigate any activity within its terms of reference and it shall have unrestricted access to
any information relevant to its activities from employees of the Naim Group. All employees are directed
to cooperate with any request made by the Committee.
b) the necessary resources required to carry out its duties and it is authorized to obtain independent
professional advice as it considers necessary.
Duties and Responsibilities
The Audit Committee shall undertake the following duties and responsibilities:a) Internal Audit
i)
Review the adequacy of the scope, functions and resources of the internal audit function and that it has
the necessary authority to carry out its work;
ii) Evaluate the internal audit programmes, processes, the results of internal audit programmes, processes
or investigations undertaken and whether or not appropriate action is taken on the recommendation of
the Internal Auditor.
46
Company No.585467-M
(continued)
b) External Audit
i) Review with the external auditors their audit plan, scope of audit and their audit reports;
ii) Evaluate the system of internal controls;
iii) Evaluate the performance of external auditors and make recommendations to the Board of Directors
on their appointment and remuneration.
c) Audit Reports
i) Consider the major findings of internal investigations and management’s response.
ii) Discuss problems and reservations arising from the interim and final external audits, and any matters
the external auditors may wish to discuss (in the absence of Management, where necessary)
d) Financial Reporting
Review the quarterly and annual financial statements of the Naim Group for recommendation to the Board
of Directors for approval, focusing particularly on:i) changes in or implementation of major accounting policy changes;
ii) significant and unusual events; and
iii) compliance with accounting standards and other legal requirements.
e) Related Party Matters
Review the related party transactions and the conflict of interest situations that may arise within the Naim
Group, including any transactions, procedures or courses of conduct that raise questions of management
integrity. They are also required to ensure that the Directors report such transactions annually to the
shareholders via the annual report.
f) Other Matters
To consider such other matters as the Committee deems appropriate or as authorised by the Board of
Directors.
Meetings
Meetings shall be not less than 4 times a year. A quorum shall consist of 2 members; the majority of members
present must be independent directors.
The members of the Audit Committee shall elect a Chairman from among their number who is an Independent
Director.
The Secretary of the Committee shall be the Company Secretary.
47
CORPORATE
GOVERNANCE STATEMENT
Introduction
On 12 September 2003, the Company was listed on the main board of Bursa Malaysia. In accordance with the
Malaysian Code of Corporate Governance (“the Code”) and in the interests of transparency, the Company reports
hereunder its compliance with the Code, The Principles of Corporate Governance and Best Practices and the
Listing Requirements.
Board of Directors
The Board of Directors is responsible to shareholders for the overall corporate governance of the Naim Group.
The role of the Board is to take the appropriate steps to enhance shareholder wealth, consistent with acceptable
levels of risk.
Board Balance
The Board currently consists of nine directors (whose career profiles are shown on pages 34 to 39) and its
composition is as follows:Category
Non-Executive and Independent Directors
Non-Executive Director
Executive Directors
Total
No. of directors
3
1
5
___
9
===
Percentage
33.33%
11.11%
55.55%
_________
100.00%
========
To ensure a balance of power and increased accountability, the Company has a clear division of responsibilities
between the Non-Executive Chairman and the Managing Director.
YB Tuan Haji Hamden Bin Haji Ahmad is the Senior Independent Non-Executive Director. Any member may
convey their concerns or queries relating to the Group to him at hamden@naimcendera.com.
Three Non-Executive Directors are fully independent of management, whilst all directors are required to bring
their independent judgment to bear on issues on strategy, performance, resources and standards of conduct.
It is the policy of the Board to have at least one meeting every quarter with additional meetings to be convened
as warranted. The Board holds other meetings on short notice when issues arise that require discussion and
decision.
48
Company No.585467-M
During the reporting period, the Board had three (3) Board Meetings. All the existing directors of the Company
were appointed Directors of the Company on 25th July 2003 and all of them attended the two Board Meetings
held thereafter. The directors’ attendance record is as follows:Name of Director
Date of Appointment
/Resignation
Number of
Board Meetings
attended
Percentage
Cheng Ah Teck
Resigned on 25 July 2003
1/1*
Not applicable
Lee Siaw Wai
1/1*
Not applicable
Lau Hui Kwong
0/1*
Not applicable
Appointed on 25 July 2003
2/2**
100%
2/2**
100%
Ir. Suyanto Bin Osman
2/2**
100%
William Wei How Sieng
2/2**
100%
Kueh Hoi Chuang
2/2**
100%
Abang Hasni Bin Abang Hasnan
2/2**
100%
2/2**
100%
2/2**
100%
Dr. Sharifuddin Bin Abdul Wahab
2/2**
100%
* Meeting held before 25 July 2003
** Meetings held after 25 July 2003
Corporate Responsibilities
The principal responsibilities of the Board of Directors are as follows:
1. To promote and act in the best interests of all stakeholders of the Group through the careful selection of Senior
Management, including the development of compensation plans based on performance.
2. To consider and monitor the potential impact of Board and Senior Management decisions on the Group’s
stakeholders, employees, customers, suppliers, financial institutions and the communities in which it operates.
Division of Responsibilities
The division of responsibilities between the Board of Directors and the Senior Management of the Group
concerning strategic and long-term planning, and establishing a process for development and adoption of
corporate strategies and objectives are as follows:i) The Board will periodically review, affirm or modify the broad strategic and financial plans of the Group as
circumstances change or as the Board, in its judgment, may determine as appropriate.
ii) The Senior Management of the Group will have responsibility to develop specific shorter-term detailed
strategic and tactical plans for implementation, which shall be consistent with the overall strategic and
financial plans approved by the Board, and will review the Group’s performance against the plans with the
Board on a quarterly basis.
Organizational Structure and Policies
The Board may, from time to time, appoint standing or special ad hoc committees consistent with the Company’s
Articles of Association and which do not conflict with any legal requirements.
49
CORPORATE GOVERNANCE STATEMENT
The Board has formed five (5) standing committees as follows:Board of Directors
Board Executive
Committee
Nomination
Committee
Remuneration
Committee
Audit
Committee
Risk
Each Committee operates under its own Terms of Reference approved by the Board. Changes to Terms of
Reference may be recommended to the Board at any time.
New committee(s) may be established by the Board when deemed necessary. The Board will determine the
general responsibilities of such new committee(s).
Special ad hoc committees may be formed, at the discretion of the Board. The Chairman or the Managing
Director shall develop the Charters or Terms of Reference for approval by the Board.
Continuous Disclosure Policy
The Company has a policy on continuous disclosure to ensure that it complies with the Listing Requirements of
Bursa Malaysia and ensure that all investors have simultaneous and equal access to the same information.
All material information that ought to be disclosed to the market is notified promptly to the Company Secretary,
who in conjunction with the Managing Director and the Chairman will ensure that such disclosure is promptly
released to Bursa Malaysia.
Other Guidelines
Appropriate members of management will be asked to attend Board meetings with the permission of the Board.
All external communications relating to the Company must and will originate from the Company’s Chairman
and Managing Director. The Board and its directors as individuals have a policy of referring all formal and
informal requests for information, comment, meetings, interviews or other questions from external sources to the
Chairman and/or Managing Director.
The Naim Group has adopted a Group Procedures and Authorities (GPA) manual. Internal controls in the form
of checks and balances between the management, board of directors and shareholders are incorporated into the
GPA as follows:•
•
•
•
Authority limits;
Levels of authority delegated;
Clear defined lines of communication; and
Tender committees
The aim of the GPA is to segregate duties and discourage employees from overriding the control system.
50
Company No.585467-M
Access to Information
The Board requires that presentations on specific significant subjects necessitating Board action will be
provided to directors in advance or during meetings so as to provide reasonable opportunity for review and to
facilitate discussion at meetings.
Senior Management will provide information and budgeted targets on a quarterly basis to assist the Board to have a
better understanding of the Naim Group’s business activities and performance. Directors may request supplemental
information from Senior Management that, in the director’s judgment, is necessary to fulfil the responsibilities of a
director. Such information will be requested in conformance with the Company’s policy on confidentiality.
Directors are also informed of any corporate announcements to be released to Bursa Malaysia and restrictions on
dealings in the Company’s shares during the closed periods.
Access to Advice
For the purpose of proper performance of their duties, Directors, whether as a full board or Committee or in their
individual capacities, are permitted to seek advice from independent advisors at the Company’s expense.
All Directors have access to the advice and services of the Company Secretary.
Appointments to the Board
The Nomination Committee makes recommendation for appointment as Directors and/or Corporate Representatives
to the Board and members’ meetings respectively, including those of subsidiaries and associated companies where
the Group has an interest. The Nomination Committee considers the required mix of skills, experience and other
qualities, including core competencies which Directors should bring to the Board.
Re-Election
All directors including the Managing Director shall submit themselves for re-election at regular intervals of at least
once in every 3 years. One-third of the Directors retire at the Company’s Annual General Meeting each year.
The dates of directors’ appointment and year of re-election of the Directors are set out below:Director
Position
Age
Date of
Appointment
Year of
Retirement
55
25 July 2003
2004
Managing Director
51
25 July 2003
2004
Executive Director
46
25 July 2003
2005
Executive Director
53
25 July 2003
2005
Kueh Hoi Chuang
Executive Director
48
25 July 2003
2006
Executive Director
Senior Independent
53
55
25 July 2003
25 July 2003
2004
2006
Independent
51
25 July 2003
2006
Dr Sharifuddin Bin Abdul Wahab
Independent
48
25 July 2003
2005
51
Directors’ Training and CEP Compliance
All directors attended the Mandatory Accreditation Programme (MAP) on 28 to 29 October 2003 except Datuk
Abdul Hamed Bin Sepawi who completed his MAP in 2001.
A seminar was organized for the directors entitled "Awareness Training for Directors of Public Listed Companies"
conducted by KPMG in KL on the 11 of September 2003. The course was accredited by Bursa Malaysia with 16
CEP points. The summary of directors’ CEP compliance as at 31 December 2003 is as follows:-
Name of Director
Kueh Hoi Chuang
CEP points to be
accumulated by
31 December 2004
72
48
48
48
48
48
48
48
48
CEP points
achieved up to
31 December 2003
16
16
16
16
16
16
16
16
0
Disclosure of Remuneration
The compensation policy of the Company is based on such factors as performance, skill, effort, responsibility,
required education, training, experience and the prevailing rates paid by comparable or competing employers.
The Remuneration Committee reviews the performance and remuneration policies for all Executive Directors to
ensure that they are rewarded in accordance with their respective contributions to the Naim Group’s
profitability. Directors abstained from all deliberation in connection with decisions on their own remuneration.
Basic Salary
This is a fixed cash sum, payable monthly. Salaries are to be reviewed annually in the light of performance and
market comparisons for similar jobs.
Fees
Directors’ fees totaling RM6,000 were paid by a subsidiary company of the Naim Group during the financial
year ended 31 December 2003. A provision for directors’ fees of RM112,500 has been made in the audited
accounts of the Company for the financial year ended 31st December 2003 subject to shareholders’ approval at
the forthcoming AGM. The said fees will be paid to the directors when approved by the shareholders.
Allowances
Allowances are payable to each director undertaking duties that lie outside his or her respective career or
profession.
52
Company No.585467-M
The details of the remuneration paid to each director who served during the 5 months of the financial year ended
31 December 2003 are as follows:Basic
Salary Allowance
RM’000
RM’000
Executive Directors
Kueh Hoi Chuang
Non-Executive Directors
YB Tuan Haji Hamden
Bin Haji Ahmad
TOTAL
Fees paid by
Company Subsidiary
RM’000
RM’000
Benefitin-kind
RM’000
Total
RM’000
330
196
154
93
33
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
2
Nil
2
2
Nil
10
8
5
6
3
342
204
161
101
36
Nil
Nil
196
Nil
Nil
Nil
Nil
Nil
2
Nil
198
Nil
Nil
Nil
806
Nil
Nil
196
Nil
Nil
Nil
Nil
Nil
6
Nil
Nil
34
Nil
Nil
1,042
Dialogue with Shareholders
Naim Group is aware of the importance of communicating with its shareholders. In the light of transparency, the
Group has formulated a Continuous Disclosure Policy to disseminate information of timely and equal access to
all its shareholders. The Chairman and Managing Director hold regular briefings for analysts, fund managers,
financial institutions and individual shareholders on the Group’s performance and future plans. However, no
material price-sensitive information shall be released to any shareholder unless proper announcement has been
made to the Exchange.
The annual general meeting shall serve as a forum for dialogue with shareholders.
Financial Reporting
The Board of Directors is responsible for ensuring that management fulfills its responsibilities for financial
reporting. The Board of Directors carries out the responsibility through the Audit Committee. The Audit
Committee meets on a quarterly basis, with the external auditors and management being present if necessary, to
review the financial statements and to discuss audit and internal control matters. On recommendation of the Audit
Committee, the Board of Directors approved the Company’s and the Group’s consolidated financial statements.
Statement of Directors’ Responsibility
The Board of Directors is required by the Companies Act 1965 to prepare financial statements for each
financial year, which give a true and fair view of the state of affairs of the Group and the Company at the end
of the financial year and of the results of operations and cash flows of the Group and the Company for the
financial year.
In preparing the financial statement for the year ended 31 December 2003, the Board of Directors are also
responsible for:•
•
•
•
adopting suitable accounting policies and ensuring their consistent application;
making reasonable and prudent judgments and estimates;
ensuring compliance with accounting standards;
confirming that financial statements have been prepared on the going concern basis;
53
Statement of Directors’ Responsibility (continued)
•
•
maintaining adequate accounting records and internal controls to safeguard the assets of the Group and the
Company; and
preventing and detecting fraud and other irregularities.
Internal Control
The Statement of Internal Control is set out on page 62 of this Annual Report.
Relationship with Auditors
The functions of the Audit Committee in relation to the external auditors and internal auditors are set out in
pages 44 to 47 of this Annual Report.
ADDITIONAL COMPLIANCE
In compliance with the Listing Requirements of Bursa Malaysia, the following information is provided hereunder.
Share Buy-Back
During the financial year, the Company has not undertaken any proposal to buy-back its shares.
Options, Warrants or Convertible Securities
No options, warrants or convertible securities were issued during the financial year under review.
American Depository Receipt (“ADR”) or Global Depository Receipt (“GDR”) Programme
The Company did not sponsor any ADR and GDR programmes, during the year under review.
Sanctions and Penalties
No sanctions or penalties were imposed on the Company, its subsidiaries, directors and management during the
financial year under review.
Non-Audit Fees
Non-audit fees amounting to RM455,398 were paid to the external auditor, as follows:i) Professional fees for IPO RM410,000;
ii) Consolidation of accounts fees RM39,220; and
iii) Training RM6,178.
Profit Guarantee
The Group did not issue any profit guarantee.
Revaluation Policy
The Group does not have any revaluation policy.
54
Company No.585467-M
Utilisation of Proceeds
As per Prospectus
RM'000
Utilized as at
31.12.2003
RM’000
Balance
unutilized
RM’000
Acquisition of land for property development
and property investment
25,000
-
25,000
Purchase of machinery
7,400
-
7,400
Purchase of information technology systems
3,082
236
2,846
Repayment of bank borrowings
7,430
5,000
2,430
Listing expenses
4,600
4,523
77
Working capital
13,036
-
13,036
Total
60,548
9,759
50,789
Purposes
Variation in Proforma Results
Financial year ending
31 December 2003
Turnover
Cost of sales
Gross Profit
Profiit Before Taxation
Less: Taxation
Profit After Taxation
Less Minority Interest
Net Profit
As stated
in propectus
RM'000
As audited
RM'000
Variance
RM'000
Variance
%
268,027
(192,099)
75,928
270,951
(179,953)
90,998
2,924
(12,146)
15,070
1.09%
(6.32%)
19.85%
67,287
(19,454)
47,833
(4,664)
43,169
77,987
(23,622)
54,365
(5,881)
48,484
10,700
4,168
6,532
1,217
5,315
15.90%
21.42%
13.66%
26.09%
12.31%
The audited net profit of RM48.48 million for the financial year ended 31 December 2003 represents an increase
of 12.39% over the forecast net profit of RM43.17 million as contained in the prospectus dated 8 August 2003
in conjunction with the Initial Public Offering for the listing of the Company on the main board of Bursa
Malaysia. This is mainly due to better margins achieved through cost savings realized upon closure of projects
completed, including that completed by a 51% owned subsidiary.
Related Party Transactions
The value and the type of related party transactions are shown on page 124 of the Annual Report. The Company
is proposing a Shareholders’ mandate at the forthcoming Annual General Meeting as follow:a) to ratify the recurrent related party transactions of a revenue or trading nature entered for the period from
12 September 2003 to 31 May 2004; and
b) to approve the Shareholders’ Mandate for recurrent related party transactions of a revenue or trading nature
for the period from 1 June 2004 to 30 June 2005.
Material Contracts
There were no material contracts entered into by the Company and/or its subsidiaries involving directors and
major shareholders, either subsisting at the end of the financial year or entered into since the end of the
previous financial year.
55
BOARD STANDING COMMITTEES
Board Executive Committee
The Board Executive Committee was established on 13 November 2003. Its membership comprises the
following:Datuk Abdul Hamed Bin Sepawi as Chairman
Datuk Hasmi Bin Hasnan as Member
Managing Director
Ir. Suyanto Bin Osman as Member
Executive Director
The composition of the Board Executive Committee is as follows:Category
Executive Director
Total
No. of directors
1
2
___
3
===
Percentage
33.33%
66.66%
________
100.00%
=======
The Board Executive Committee is crucial for articulating direction, evaluating effectiveness and helping to
pursue excellence in organizational performance by encouraging constructive dialogue within the Board and
Committee.
Board Executive Committee Terms of Reference
Composition
The Board Executive Committee shall be established and members thereto shall be appointed by the Board. The
Committee shall have no fewer than three (3) members.
Responsibilities
The Board Executive Committee is responsible for implementing the decisions and policies of the Board as well
as to coordinate activities necessary to ensure successful implementation of the Group’s business.
Duties
The duties & responsibilities of the Executive Committee are as follows:a) to review and adopt the strategic plan for the Group;
b) to oversee the conduct of the Company’s business plan and evaluate whether the business is properly
managed;
c) to develop and implement an investor relations programme or shareholder communications policy for the
Company;
56
Company No.585467-M
Duties (continued)
d) to review the adequacy and the integrity of the Company’s internal control systems and management
information systems;
e) to decide on all matters relating to banking facilities as may be required for the conduct of the Group’s
operations;
f) the Board Executive Committee is also empowered to :i) review, recommend and approve capital expenditure;
ii) review, recommend and approve disposal of capital items;
iii) review, recommend and approve the award of tenders
within the limits of authority determined by the Board.
(Note: The Audit Committee Report is set out on pages 44 to 47 of this Annual Report.)
Nomination Committee
The Nomination Committee was established on 13 November 2003. It comprises the following members:Datuk Abdul Hamed Bin Sepawi as Chairman
YB Tuan Haji Hamden Bin Haji Ahmad as Member
Ir. Abang Jemat Bin Abang Bujang as Member
The composition of the Nomination Committee is as follows:Category
Total
No. of directors
1
2
___
3
===
Percentage
33.33%
66.66%
________
100.00%
=======
The main role of the Committee is to select and recommend candidates for Board appointments and re-election
and to regularly review board composition and identify any need for change in the board and the
committees. The Nomination Committee ensures that Board members do not have material conflict of interest,
commercial relationships, nor professional services relationships or potential for such relationships with the
group. In the selection of nominees, the committee strives to maintain a balance of business experience among
the directors, in order to maximize the effectiveness of the Board. The criteria include :(a) business acumen and leadership;
(b) experience at a senior policy-making level in one or more functional areas of a major company;
(c) business creativity and vision.
57
Nomination Committee (continued)
Candidates must be assessed for a demonstrable personal commitment to the Group and the interests of all of
its stakeholders, as follows:
(a) Investing time and effort on a consistent basis;
(b) Maintenance of an awareness of and perspectives on relevant current business issues;
(c) Participating openly and fully in Board and Committee deliberations; and
(d) Avoidance of an over-commitment to other callings.
Nomination Committee Terms of Reference
Composition
The Nomination Committee shall be appointed by the Board from among their number and shall comprise no
fewer than three (3) members, all of whom shall be Non-Executive Directors and a majority shall be Independent
Non-Executive Directors.
The duties & responsibilities of the Nomination Committee are as follows:a) To consider and recommend to the Board competent persons of the highest calibre and integrity for
appointment as:i) members of the Board
ii) members of the Board Committees
b) to review on an annual basis the required mix of skills and experience and other qualities, including core
competencies of non-executive Directors;
c) to review the performance of members of the Board, and to assess the effectiveness of the Board
Committees and the Board as a whole and the contribution of each Director;
d) to review the Board structure and size and the balance of appointments between Executive Directors and
Non-Executive Directors;
e) to review the adequacy of Board Committees;
f) to plan for and ensure orderly management succession.
Remuneration Committee
The Remuneration Committed was formed on 13 November 2003. The Committee consists of the following
members:Ir. Abang Jemat Bin Abang Bujang as Chairman
58
Company No.585467-M
Remuneration Committee (continued)
Datuk Hasmi Bin Hasnan as Member
Dr. Sharifuddin Bin Abdul Wahab as Member
The composition of the Remuneration Committee is as follows:Category
Executive Director
Total
No. of directors
2
1
___
3
===
Percentage
66.66%
33.33%
________
100.00%
=======
The main role of the Remuneration Committee is to devise and implement reward systems that attract, retain
and motivate people with the right attributes, skills and abilities to run the business of the Group. In
determining remuneration, the key factor that is taken into consideration is the appropriate market
median, with any variables being strictly performance driven.
Remuneration Committee Terms of Reference
Composition
The Remuneration Committee shall be appointed by the Board from among their number and shall comprise
now fewer than three (3) members, a majority of members shall be Non-Executive Directors.
The duties & responsibilities of the Remuneration Committee are as follows:a) to review annually and recommend to the Board the Company’s overall remuneration policy and
guidelines for Executive Directors to ensure that remuneration packages are performance based;
b) to enhance shareholders’ value by ensuring that individual performance and reward of Executive Directors
reflect and reinforce the business objectives and long term goals of the Group;
c) to keep abreast with changes in external market remuneration packages and review and recommend
changes to the Board when deemed necessary.
No member of the Committee or any other Director shall be involved in the deliberations in respect of his own
remuneration and benefits to be granted.
Risk Management Committee
The Risk Management Committee was established on 13 November 2003. The Risk Management Committee
comprises the following:Datuk Hasmi Bin Hasnan as Chairman
59
Risk Management Committee (continued)
YB Tuan Haji Hamden Bin Haji Ahmad as Member
Ir. Suyanto Bin Osman as Member
Executive Director
William Wei How Sieng as Member
Executive Director
Kueh Hoi Chuang as Member
Executive Director
Leong Chin Chiew as Member
Head of Construction Division
A representative from the Internal Audit Department
The composition of the Risk Management Committee is as follows:Category
Executive Director
Management Staff
Internal Auditor
Total
No. of directors
1
4
1
1
___
7
====
Percentage
14.29%
57.13%
14.29%
14.29%
________
100.00%
=======
The Risk Management Committee is empowered to assist the Board in fulfilling its responsibilities to
shareholders and other stakeholders to oversee the Group’s risk management. Many of the risks that affect the
property development and construction divisions have been anticipated from the beginning and have therefore
been informally monitored and dealt with.
The concept of risk management and risk management framework was introduced late last year and in this
connection, the risk awareness of staff at all levels of the management within the Group has been raised. The
purpose of risk management is to assess and manage risks which could prevent key objectives from being
achieved and /or have an adverse affect on the Group’s performance, delivery and reputation.
The principal stages in the risk management framework initiated during the year were risk identification and risk
mitigation. Risk identification involves examination of the possible risks that could have occured as well as
identifying the setbacks that did occur. Risk mitigation addresses situations whereby risks could have been and
can be avoided and what contingency plans could and have been made. Each division is required to formulate
its mitigation actions and contingency plans for each risk identified. Risk monitoring and reporting will be
carried out on a quarterly basis, keeping track of the identified risks, monitoring residual risks and identifying
newly emerged risks, ensuring the execution of risk plans and evaluating their effectiveness in reducing risk. This
monitoring takes place at frequent intervals because risks change as projects mature, new risks develop, or
anticipated risks disappear.
60
Company No.585467-M
Risk Management Committee Terms of Reference
Composition
identify
& define risk
report
The Risk Management Committee shall comprise no
fewer than five (5) members and one of which be
representative from the Internal Audit.
assess & measure
monitoring
a) To establish risk policies and risk framework
manage
& control
b) To identify, evaluate and monitor the risks
portfolio and formulate mitigation strategies/
action plans to manage the overall risk
associated with the Group’s activities;
The structure of the Risk Management Committee is as
follows:-
Board of Directors
Risk Management
Committee
The duties and responsibilities of the Risk Management
Committee are as follows:-
Audit
Committee
Construction
Property Development
Property Sales
Group Finance/Accounts/Administration
Property Management
Business Development and special projects
c) To recommend appropriate risk management
policies and procedures which shall be reviewed
regularly to ensure that they make an effective
contribution to the long term viability of the
Group;
d) To review on a periodical basis the Group’s
overall objectives in assesing the current risk
portfolio composition and the risk appetite.
e) To provide the Board with quarterly reports on the
effectiveness of the risk management and internal
control system;
f) To ensure a proper balance between risk incurred
and potential returns to shareholders;
g) To assess, with the Internal Audit Department, the
adequacy and reliability of the risk management
process;
h) Such other responsibilities as may be delegated
by the Board from time to time.
The Internal Audit Department may pursue further in
areas identified as high risks and report its findings and
recommendations to the Audit Committee.
This statement is made in accordance with a
Resolution of the Board of Directors dated 26 April
2004
61
STATEMENT ON
INTERNAL CONTROL
Introduction
This statement on internal control by the Board of Directors is made pursuant to Bursa Malaysia Listing
Requirements with regard to the Group’s compliance with the principles and best practices for internal controls
as provided in the Malaysian Code of Corporate Governance ("the Code").
The Board of Naim believes in good corporate governance and managing the affairs of the Group in accordance
with the Code. In addition, the Board believes that it is very much the voluntary good behaviour and
credibility of the Board which will create a good governance culture for the entire organisation and its partners.
Responsibility
The Board acknowledges its responsibilities for maintaining a sound system of internal control to safeguard
shareholders’ investment and the Group’s assets. The Board also acknowledges its responsibility to review the
system for adequacy and integrity. The internal control system is a process that is put in place at all levels of the
organisation to provide reasonable assurance that the Group’s business objectives will be achieved. The system
covers financial controls, operational controls, compliance controls, as well as risk management. Because of the
limitations that are inherent in any system of internal control, it is designed to manage, rather than eliminate,
the risk of failure to achieve corporate objectives. Accordingly, it can only provide reasonable but not absolute
assurance against material misstatement or loss.
Risk Management
During the year under review, the Board has established a Risk Management Committee, comprising
representatives from the Board, the management and the internal audit department. The Committee, charged
with the responsibility of identifying, assessing, prioritising, managing and controlling risks faced by the Group,
is presently formalising the risk management framework therefor. The framework covers property development,
construction, business development and finance.
Key Processes of Internal Controls
The key processes of internal controls are summarised as follows:
• Organisational structure that lays down clear lines of responsibility and reporting.
• Budgetary control, where actual performance is constantly monitored against budgets and variances are
investigated.
• Group Procedures and Authorities manual, which sets out the operating control procedures pertaining to
finance, accounting, credit control, human resources, procurement and inventory. The control procedures,
inter alia, include setting limits for approving expenditure and procurement.
• Staff handbook that sets out general employment terms and the Group’s corporate code of ethics.
• Quality management system requiring the management and staff of subsidiary, Naim Cendera Sdn. Bhd.
(accredited with ISO 9002 Certification since 2000) to adhere to a set of well-established standard
operating procedures covering all major critical processes. Surveillance audits are conducted yearly to
ensure compliance with the system.
Conclusion
During the current financial year to the date of this report, no significant control weaknesses were identified.
However, a number of minor control weaknesses were noted, all of which have been, or are being, addressed.
These are not expected to result in any material loss, contingency or uncertainty that would require disclosure
in the Company’s annual report.
This statement is made in accordance with a resolution of the Board of Directors dated 26 April 2004.
62
HUMAN RESOURCES OUR STRONGEST ASSET
Company No.585467-M
The Naim Group’s strongest asset is its human resource, a high-calibre management team and a dedicated,
efficient and highly-skilled workforce of 408 people (including 128 casual workers), assembled via a long-term
policy of continuous human resource development.
Harmonious Working Environment
The Group enjoys a harmonious working environment with one of the lowest staff turnover rates in the
industry and no history of industrial disputes. In the year in review, a total of 29 staff resigned from the Group,
all of whom were junior staff, while 32 people joined, including a number of senior managers and other
professionals.
Quality of The Workforce
14 are full members of professional Institutions or Associations
7 are Masters Degree Holders,
62 are Bachelors Degree Holders,
40 have Diploma-Level Qualifications, and
54 have Vocational Qualifications
The following chart shows the distribution of educational and professional qualifications amongst the Naim
Group’s 280 permanent staff.
Professionals 29.64%
Others 36.78%
Diploma Holders 14.29%
Vocational Qualifications 19.29%
Rewarding Performance
One of the greatest challenges we face is maintaining the loyalty, motivation and dedication of our staff in an
increasingly competitive, demand-driven labour market. Therefore we offer a competitive remuneration
package that is constantly reviewed to keep up with industry norms, and an in-service appraisal system to ensure
that excellent performance is not only acknowledged but also rewarded.
Developing a Knowledge-Based Workforce
The Group is committed to creating a dynamic, efficient and flexible workforce that is able to thrive in the
constantly changing business environment. Therefore, training is one of our key priorities. During the year in
review the Group offered a varied mix of training courses focusing on both hard and soft skills, at a cost of about
RM160,000, and has allocated a Training Budget of RM434,000 for 2004.
63
CORPORATE
CITIZENSHIP
“To balance the interest of all stakeholders with an equal measure of social responsibility is to close the gap
between the vision of an organization and its perception in a community - yielding both financial and societal
benefits.”
At Naim we owe much of our success to the support of the local community members who buy our products.
In recognition of this support, and to reflect our strong commitment to strengthening social values and
community ties, we do our very best to contribute to the community ourselves.
To ensure that our developments are thriving, people-friendly communities, we ensure that playgrounds,
landscaping and generous peripherals are provided in all our housing development, and that trees are planted,
open spaces beautified and green buffer zones retained to preserve a spacious and natural living environment.
And to assist the less fortunate in the community and those organisations that contribute to our quality of life,
we make substantial charitable donations and sponsor a host of community events. During the year in review
the Naim Group has donated to or sponsored a host of charitable and community organisations. Some of the
most notable are listed below.
Organisations
PERKIM (Pertubuhan Kebajikan Islam Malaysia)
SJK Chung Hwa Tudan
Lembaga Amanah Kebajikan Masjid Sarawak
Majlis Mutiara Kasih Bersama Menteri
Huarend Education Fund
MRCS Dialysis Center
Persatuan Bisaya Sarawak
Jabatan Kuasa Keselamatan
JKK Kampung Abang Amin
Lembaga Amanah Kebajikan
Pusat Pemulihan Miri
St Peter’s Church
Tabung Pendidikan dan Kebajikan
Sunflower Home Miri
Persatuan Harapan Miri
Persatuan Anak Yatim
Persatuan Kebajikan Anak Yatim
Pertubuhan Amal Kebajikan
Tabung Anak Yatim Masjid
Dayak Association Miri
64
SOCIAL
RESPONSIBILITY
Company No.585467-M
Conserving the Environment
The Naim Group firmly believes that environmental
conservation and stewardship is one of the key
attributes of a successful development and
construction company. Therefore we make every
effort to ensure that our developments work in
harmony with the natural environment. This includes
incorporating environmental buffer zones into our
projects, minimizing tree felling, replanting with
natural species, and leaving abundant green spaces
between residential areas and on verges, approach
roads and other unbuilt areas.
We undertake the following steps to protect the
environment:
• Prevent or minimize any potential adverse impact
arising from our operations, products and services.
• Review and improve continuously our protocols,
operations, products and services to enhance our
environmental performance.
• Motivate employees to conduct their occupational
and personal activities in an environmentally
responsible manner.
• Promote high environmental performance
standards amongst our stakeholders and the
industry at large.
Promoting Occupational Health and Safety
We at Naim are committed to maintaining a safe and
healthy working environment for all our employees,
customers, sub-contractors, service providers and the
general public, insisting on total compliance with
legislative requirements in every area of our
activities.
65
SOCIAL RESPONSIBILITY
The following steps are taken to maintain a safe and healthy working environment:
• Provide continuous training and supervision to all employees to build a safe and healthy workplace culture.
• Equip all employees with adequate personal protective equipment, wherever appropriate.
• Develop each individual’s sense of personal responsibility and accountability for their own activities, and for
persons and facilities under their charge.
• Require sub-contractors, service providers and suppliers working on our behalf to adhere to our safety and
health standards.
Implementing our Commitment
To ensure that this commitment is more than mere words, the Group has put into place internal rules to deal
with pollution, depletion and conservation of natural resources as well as to protect human health and safety.
Where necessary, new modes of behaviour will be inculcated and construction processes redesigned to be
environment and people-friendly.
The internal rules cover the following areas:
• Minimum disturbance to soil condition
• Prevention of pollution and effective waste
management
• Proper sewage treatment
• Adherence to occupational health and safety
regulations
• Adherence to fire prevention and personal safety
regulations
• Environmental impact of land acquisition and land
use
• Socio-economic impact of projects on local
communities, including resettlement
• Renewable and/or recyclable use of construction
materials
66
SPECIAL
INITIATIVE
Company No.585467-M
GROOMING BUMIPUTERA CONTRACTORS
A Naim Group Special Initiative
As a Class A bumiputera contractor and Sarawak’s leading property developer,
the Naim Group recognises its responsibility to small bumiputera businesses and
the urgent need to raise the socio-economic standing of Sarawak’s bumiputera
community. To ensure that these small companies are able to develop as viable
businesses rather than just survive on the “crumbs from the table,” the Naim
Group has set up a wholly owned subsidiary, Naim Citra Sdn Bhd, whose sole
task is grooming, mentoring and developing bumiputera contractors.
The programme began in 2001, with 31 small bumiputera contractors in the D,
E and F categories. They were assigned sub-contracts within the Southern Zone
Rural Water Supply Project, carried out under a Government Umbrella Scheme
by the Ministry of Rural Development, with an annual budget of approximately
RM 10 million. Throughout the project the contractors received advice,
encouragement and daily supervision from experienced Naim staff, ensuring
they were able to meet their contractual obligations. At the same time, Naim
Citra ensured that their cash flows were maintained and their financial exposure
minimised, so that they were able to concentrate on delivering a
professional job on time and within budget.
The first phase of the project was a resounding success, with over 70% of the
bumiputera contractors achieving the targets set for them. The second phase was
expanded considerably with a total of 61 businesses involved, and the third
phase is currently under way with 40 new companies.
As well as providing contracts, financial assistance and guidance, the Naim
Group hosts an annual dinner for the participating contractors, where awards
are presented to the three leading performers. To encourage increased
professionalism, the Group also provides two scholarships every year to
contractors or their staff wishing to pursue degree-level studies. Tangible proof
of the project’s resounding success is one company’s achievement in acquiring
Class B contractor status, thus providing keen competition for the Naim Group’s
subsidiaries.
67
COMMITMENT TO
QUALITY & VALUE
Customer Satisfaction Equals Market Leadership
Quality and Value are the cornerstones of our business, because Quality and Value mean customer satisfaction.
Therefore our housing projects are attractive, self-contained, people-friendly communities with homes to suit
every family and every budget. Quality of construction and finish are unsurpassed, and backed up by
comprehensive after-sales service.
However, this commitment to quality and value is not simply an example of Naim Group’s social
responsibility; it also makes excellent business sense, because thousands of satisfied home owners are the most
powerful sales force a property developer can possess. Therefore we are firmly convinced that customer
satisfaction is one of the most significant factors contributing to our market leadership in Sarawak’s property
sector. Testimonials from our buyers certainly bear out this belief.
Customer Satisfaction Equals Repeat Business
Quality and Value are just as important to our Construction Division. Our Class A Bumiputera Contractor Status,
coveted ISO 9000 certification and implementation of a Total Quality Management system, as well as our track
record of timely completion within budget, has helped us achieve hundreds of millions of Ringgit worth of
repeat business from satisfied clients in both public and private sectors.
Formal Accreditations and Registrations
Our formal Quality and Capability accreditations and registrations include the following:
•
•
•
•
ISO 9002 Accreditation by Moody International Certification Ltd and AOQC Moody (Malaysia) Sdn Bhd
Pusat Khidmat Kontraktor Negeri Sarawak (PKK) under Class A
Unit Pendaftaran Kontraktor Negeri Sarawak (UPK) under Class A
Construction Industry Development Board (CIDB) under Grade 7
Quality Awards and Acknowledgements
Thanks to our stringent adherence to quality standards, we have received the ultimate accolade from our peers.
During the year under review, we were selected to receive the Best Contractor Award – Medium Scale Building
Project, in the CIDB awards for 2003, the second year in succession we have won a prestigious award from
CIDB.
We have also been acknowledged for the quality of our corporate reporting, receiving the Sarawak Chamber of
Commerce and Industry (SCCI) Award for Best Annual Report (Non-Listed Companies Category) for our 2002
Annual Report.
68
NAIM GROUP
IN THE NEWS
Company No.585467-M
69
NAIM GROUP IN THE NEWS
70
Company No.585467-M
71
THE ROAD
TO LISTING
30 Sept 2002
30 September 2002 - Kuala Lumpur
Application for Main Board Listing submitted to the
Securities Commission
22 Jan 2003
23 Jan
22 January 2003 - Kota Samarahan
A
delegation comprising Ms. Mazlina Sanad,
Ms. Fong Yee Mei and Ms. Phang Siew Yin from the
Securities Commission, Kuala Lumpur visited Desa
Ilmu.
23 January 2003 - Miri
Tour to Bandar Baru Permyjaya by the
Securities Commission representatives.
7 Apr
7 April 2003 - Kuala Lumpur
NCSB’s Application for Main Board Listing approved
by the Securities Commission
7 July
7 July 2003 - Ground Floor, Wisma Naim, Kuching
Staff of NCSB attended a briefing on Share Financing
conducted by Bumiputera-Commerce Bank Berhad,
Satok Branch. This briefing informed staff about end
financing options for funding the purchase of shares.
11 July
11 July 2003 - Miri & Kuching
15 Fund Managers and Analysts from various
FinancialInstitutions from West Malaysia visited the
project sites in Miri and Kuching. They also attended a
briefing and a corporate presentation at Wisma Naim.
72
Company No.585467-M
11 July
11 July - Wisma Naim, Kuching
A series of one-to-one presentations were made to
several State Investment Houses and Statutory Bodies,
including ASSAR, Lembaga Masjid Negeri, HIKMAH,
STIDC and LCDA.
28 July - Wisma Naim, Kuching
Underwriting Agreement Signing Ceremony between
Naim Cendera Holdings Berhad and AmMerchant
Bank Berhad, (principal underwriter for our Bursa
Malaysia listing exercise) and co-underwriters Am
Securities Sdn Bhd, OSK Securities Berhad and BBMB
Securities Sdn Bhd. The ceremomy was witnessed by
YAB Chief Minister of Sarawak, Pehin Sri Dr. Haji
Abdul Taib Bin Mahmud.
28 July
8 Aug
8 August - Kuala Lumpur
Launching of Naim Cendera Holdings Bhd’s
Prospectus and Website by the Timbalan Menteri
Kewangan 1, (Deputy Finance Minister) YB Dato
Dr. Shafie Mohd. Salleh.
12 Sept
12 September - Kuala Lumpur
Listing of Naim Cendera Holdings Bhd on the Main
Board of Bursa Malaysia.
73
DIARY OF
GROUP EVENTS
10 Jan
Completion of two schools,
SRK Merbau and SMK Merbau in Miri.
21 Jan
Handing over of the completed
SRK & SMK Merbau in Miri to Jabatan Keraja Raya.
12 February 2003 - Miri
Chinese New Year Open House at
‘Allamanda Gold’, Bandar Baru Permyjaya,
organized by NCSB.
12 Feb
14 February 2003 - Miri
NCSB Miri staff held its ‘Family Dinner’ at
the Pavilion Park City Everly Hotel.
14 Feb
15 Feb
15 February 2003 - Bintulu
NCSB Bintulu staff with its subsidiary, TR Earthwork
Sdn Bhd, held a joint ‘Family Dinner’ at the Marco
Polo Restaurant.
74
Company No.585467-M
22-23 Feb
22 – 23 February 2003 - Sibu
Property Road Show on Bandar Baru Permyjaya, Miri,
and Desa Ilmu, Kota Samarahan organised by Sarbex
at Tanahmas Hotel.
27 Feb
27 February 2003 - Kota Samarahan
Visit by the CEO of the Housing Development
Corporation, Dr. Hj. Abang Azahari Bin Abang Hadari,
to NCSB’s Desa Ilmu scheme.
1-2 Mar
1 -2 March 2003 - Bintulu
and Desa Ilmu, Kota Samarahan, organised by Sarbex
at Park City Beverly Hotel.
4 Mar
4 March 2003 - Miri
Launching of the single-storey terrace house
“Adenium” at Bandar Baru Permyjaya.
8-9 Mar
8 – 9 March 2003 - Miri
and Desa Ilmu, Kota Samarahan, organised by Sarbex
at Boulevard Shopping Complex.
75
DIARY OF GROUP EVENTS
22-23 Mar
22 - 23 March 2003 - Kuching
The sales team for Desa Ilmu, Kota Samarahan, took
part in a Property Fair organized by Bank Utama
Berhad at Dewan Masyarakat.
27 Mar
27 March 2003 - Miri
Study Tour by the Miri Municipal Council
to Bandar Baru Permyjaya.
5-7 Apr
5 – 7 April 2003 - Miri
NCSB organised the Preview Show for “Miss Tourism
Intercontinental 2003” at Rihga Royal Hotel to raise
funds for the proposed SK Chung Hwa Tudan,
Sunflower Centre, Home for the Aged Miri, and Pusat
Pemulihan Dalam Komuniti.
The Beauty Pageant contestants also visited Bandar
Baru Permyjaya and the Sunflower Centre.
1 May
1 May 2003 - Kota Samarahan & Miri
Labour Day celebrations at Desa Ilmu and
Bandar Baru Permyjaya.
9 May
30 May
9 May 2003 - Kota Samarahan
Friendly football match between NCSB and the Lands
& Survey Department, Kota Samarahan, at the
Kompleks Sukan.
30 May 2003 - Miri
Launching of single-storey terrace house “Aster”
in Desa Indah 3, Bandar Baru Permyjyaya.
76
Company No.585467-M
25 June 2003 - Kuching
Custodev Tiga Sdn Bhd officially changed its
name to Desa Ilmu Sdn Bhd.
27 June
9 May
27 June 2003 - Kuching
Fire drill exercise for the occupants of the 9-storey
Wisma Naim, organised by Hasmi & Associates
Property Services in collaboration with the Kuching
Fire and Rescue Services Department.
10 July 2003 - Crowne Plaza Riverside Hotel, Kuching
Desa Ilmu Sdn Bhd held its inaugural `Buyer Get
Buyer’ Dinner. Among those present were guests of
honour Datuk Sri Haji Mohd Asfia Bin Awang Nassar
(Advisor to the Naim Group) and Assistant Minister of
Housing YB Dr. Abang Abd. Rauf Bin Abang Hj. Zen.
27 June
The change of our subsidiary company’s name, from
Custodev Tiga Sdn Bhd to Desa Ilmu Sdn Bhd, was
formally announced at the dinner.
22 July 2003 - Kuching
In conjunction with Sarawak’s 40 Anniversary of
Independence Within Malaysia (Jubli Delima Sarawak),a
contingent comprising 33 Naim staff participated in the
parade held at Padang Merdeka.
22 July
23 July
23 July 2003 - Miri
An inspection visit to SRK & SMK Merbau was
conducted by the Judging Committee for the
Malaysian Construction Industry Excellence Award.
77
DIARY OF GROUP EVENTS
1 Aug
1 August 2003 - Miri
Launching of the 248 acre Desa Pujut 2, comprising
1,562 housing units, 36 shops and 1 wet market, at
Bandar Baru Permyjaya. Two new single-storey
semi detached designs, “Petunia” and “Gardenia”
were also launched.
31 Aug
31 August 2003 - Miri
NCSB contingent took part in the Merdeka Day Parade.
12 Sept
12 September 2003 - Sunway Lagoon Resort, Kuala Lumpur
Naim adjudged winner of the prestigious Malaysian
Construction Industry Excellence Award organized by
the Construction Industry Development Board
Malaysia (CIDB) under Category 1: Project Award, Sub
Category Building – Medium Scale Project, for the
successful construction of SRK & SMK Merbau, in Miri.
17 September 2003 - Istana Hotel, Kuala Lumpur
Appreciation Dinner to express thanks to everybody
involved in the Group’s double triumphs; the highly
successful listing on the Main Board of Bursa Malaysia
and the winning of the CIDB Award. Guest of Honour
was YAB the Chief Minister of Sarawak, Pehin Sri Dr.
Haji Abdul Taib Bin Mahmud.
17 Sept
A Memorandum Of Understanding with Realmild Sdn
Bhd was also signed at the dinner.
78
Company No.585467-M
25-28 Sept
25 – 28 September 2003 - Kuching
Property Road Show to promote Desa Ilmu, Kota
Samarahan at Taman Kereta, organized by Sarbex.
27 Sept
27 September 2003 - Miri
A group of 40 retirees and their spouses
from Shell were given a grand tour of all
show houses at Bandar Baru Permyjaya.
2 – 3 October 2003 - Singapore
Road Show in Singapore, in collaboration with Credit
Suisse First Boston (Singapore) Securities Pte Ltd and
Deutsche Securities Asia Ltd to meet potential foreign
investors.
2-3 Oct
14 Dec
14 December 2003 - Hilton Hotel, Kuching
Naim Group Annual Dinner & Hari Raya Gathering.
79
Appendix 1
OUTLOOK FOR THE MALAYSIAN ECONOMY
The following are independent opinions from authoritative sources on the outlook for the Malaysian Economy
for 2004 and beyond. Unless otherwise stated, these organisations have no connection with the Naim Group or
its Subsidiaries. All statements are copyright of their respective originators and are used under the rule of fair
comment.
Kasikorn Research Centre, Thailand
KRC deems that positive economic factors from internally and externally, plus the weakening USD, are all
favorable to the competitiveness of Malaysian goods in the world market. In addition, their inflation remains low
and other favorable financial factors, including a trend toward higher employment and wages, will help
stimulate continued spending by Malaysians. All these positive factors indicate further growth rate for the
Malaysian economy. The latest economic data for the accelerating Malaysian GDP Q4-03 evidences this.
Therefore, KRC estimates that Malaysian economy is likely to expand steadily by 5.6 percent in 2004,
accelerating over last year.
Tradewatch (Australian Govt. Trade Advisor)
Despite the impact of the regional outbreak of Severe Acute Respiratory Syndrome (SARS) and subdued global
demand, the Malaysian economy performed better than expected in 2003. While investment spending is
recovering slowly (reflecting lingering caution in the business community), private consumption and
manufacturing outputs are growing strongly. Consensus Economics estimate that the Malaysian economy will
expand by 5.6 per cent in 2004.
Private consumption is expected to remain strong in 2004, while business investment and manufacturing
production are expected to experience substantial increases. Inflation is expected to remain moderate,
averaging 1.8 per cent in 2004. Consensus Economics forecasts sustained merchandise trade surpluses which
will result in a large current account surplus in 2004 (estimated at US$8.5 billion).
However, with trade around 180 per cent of Malaysia’s GDP, growth is largely dependent on the pace of
recovery in the US and Japan, its largest export markets.
Pricewaterhouse Coopers
Bank Negara Malaysia, the central bank, expects the Malaysian economy to grow between 6% and 6.5% in
2004, substantially above the 5.2% gross domestic product (GDP) growth attained in 2003. All sectors of the
economy would see growth, with the manufacturing and services sectors leading the way.
Among the reasons for the bullish outlook was a strong rebound of the private sector, which is starting to take
the lead role as the country’s engine of growth. Private consumption is expected to rise 8.1% this year versus
5.1% in 2003, while private investment activities are forecast to gain 11.5%, much higher than the 1.1%
registered last year. The projections for growth in 2004 are also based on stronger global economic growth and
led by the synchronized recovery across all regions, an upturn in global electronics’ prices, and firm prices for
crude palm oil and crude oil.
The Government’s buoyant estimate puts Malaysia’s economy on track to becoming one of the fastest growing
in the Asia-Pacific this year.
80
Company No.585467-M
Malaysian Government Economic Report 2003/2004
The world economic performance in the first half of 2003 took a dive on account of the war in Iraq and the
outbreak of the Severe Acute Respiratory Syndrome (“SARS”). With the end of the Iraq war and containment of
SARS, global economic performance in the second half of 2003 is expected to improve supported by indications
of an upturn in the major economies towards the end of the second quarter. The expected return of investor and
consumer confidence, resulting from accommodative monetary policies and fiscal easing in major economies,
will further boost demand. However, there exist downside risks arising from continued global current account
imbalances, inadequate structural reforms in some economies and security concerns in several parts of the
world.
World output growth is expected to improve marginally to 3.2% in 2003 (2003:3%) given the weak economic
environment. Weaknesses still persist in the euro area and Japan although some positive signs have emerged.
Global growth continues to be dependent on the US, whose growth is expected to be slightly lower than the
previous year at 2.2% (2002:2.4%)
Given the better prospects of world economic growth and international trade in 2004, with firm recovery
taking place in several substantial industrialised countries and regional economies, the Malaysian economy is
projected to strengthen and be reinforced by more vigorous domestic economic activities. In this regard,
domestic demand (excluding change in stocks) in real terms is likely to increase at a fairly strong rate of 4.7%
(2003:5%), generated largely by the private sector resuming its role as the engine of growth and supported by
pro-growth fiscal and monetary measures.
Mayban Securities
Not too late to join the party - 2nd Quarter Outlook 2004
Malaysia is riding on a rejuvenated vigour and optimism. Asset prices are recovering and the private sector is
back in the growth drivers' seat. At the macro level, 2004 has thus far surprised on the upside. We expect the
momentum to continue in 2Q04.
We are upgrading our 2004 GDP growth forecast to 6.6% from 6.0%. There are enough evidence on the
output and demand sides to warrant this revision. In particular, the manufacturing sector appears to be firing on
all cylinders with an expected double digit growth this year. The top down picture for Malaysian equities looks
good:
1) global economies are recovering steadily,
2) political risk has declined after the ruling coalition's resounding win in the general elections,
3) economic growth is gaining momentum,
4) corporate earnings growth is rising even faster,
5) foreign and local investor sentiment is improving, and
6) excess liquidity in the system provides the ability to shift funds into equity.
Valuations are still attractive. Due to improving fundamentals, better sentiments and reduced risk premiums, we
reckon that the market deserves to trade at a higher PER of 18 times. With earnings growth of 14.8%, that
translates to a KLCI fair value of 1,020, giving an upside of 14%. We believe that it's still not too late to join the
party.
The main themes are domestic consumption and external trade as well as oil and gas, and water. We believe
that the domestic consumption story is still a major driver for the equity market. The main beneficiaries are our
overweight sectors of Banking, Gaming and Property.
81
Institute of Developing Economics, Japan
Forecast for the Economy in 2004: 5.6% Growth, Fueled by an Export Recovery and Private-Sector-led
Expansion of Domestic Demand.
As the year 2004 unfolds, exports are expected to enter a recovery under the effects of expansions in the
IT-related markets and a growing U.S. economy, as well as growth in private consumption and private
investment, with the result that Malaysia’s economy is forecast to register a growth rate of 5.6%, up 1 percentage
point from 2003. Given the prospect that consumer confidence will be boosted in 2004 by factors such as an
economic expansion and a continuation of the low-interest rate policy, private consumption in the year is
forecast to increase by 6.6%, a rate faster than 2003’s 4.5%.
The investment environment will improve as a result of policies, such as corporate tax cuts, aimed at achieving
a private-sector-led economic expansion, and private investment in 2004 is forecast to increase by 10.4%, a rate
5.7 percentage points higher than in 2003. Reflecting a lull in public works projects, and thus an end, for the
time being, to their ability to perform the role as a means of economic stimulus, public investment is expected
to decrease by 4.1% in 2004. On the other hand, government consumption is expected to increase by 4.9% in
2004, due mainly to pay raises for government employees.
Real-term exports in 2004 are expected to increase by 7.2%, a rate much higher than in 2003, led mainly by
increasing exports to the advanced economies and to China. Stimulated by the favorable performance of private
investment and exports, imports are also forecast to increase by 6.9% in 2004, accelerating from the 1.7%
growth rate registered in 2003. As a combined effect of the foregoing factors, the Malaysian economy in 2004,
under the stimulus of an expansion of private domestic demand, and by expanding exports spurred by an upturn
in the world economy, is forecast to register a growth rate of 5.6%, 1 percentage point higher than in 2003. The
inflation rate of general prices in 2004 is forecast to be slightly higher than the rate in 2003, due to the effect of
the economic expansion, but to still remain at a low 1.7%.
Forecast for the Economy in 2004: 5.6% Growth, Fueled by an Export Recovery and Private-Sector-led
Expansion of Domestic Demand.
As the year 2004 unfolds, exports are expected to enter a recovery under the effects of expansions in the
IT-related markets and a growing U.S. economy, as well as growth in private consumption and private
investment, with the result that Malaysia’s economy is forecast to register a growth rate of 5.6%, up 1 percentage
point from 2003. Given the prospect that consumer confidence will be boosted in 2004 by factors such as an
economic expansion and a continuation of the low-interest rate policy, private consumption in the year is
forecast to increase by 6.6%, a rate faster than 2003’s 4.5%.
The investment environment will improve as a result of policies, such as corporate tax cuts, aimed at achieving
a private-sector-led economic expansion, and private investment in 2004 is forecast to increase by 10.4%, a rate
5.7 percentage points higher than in 2003. Reflecting a lull in public works projects, and thus an end, for the
time being, to their ability to perform the role as a means of economic stimulus, public investment is expected
to decrease by 4.1% in 2004. On the other hand, government consumption is expected to increase by 4.9% in
2004, due mainly to pay raises for government employees. Real-term exports in 2004 are expected to increase
by 7.2%, a rate much higher than in 2003, led mainly by increasing exports to the advanced economies and to
China. Stimulated by the favorable performance of private investment and exports, imports are also forecast to
increase by 6.9% in 2004, accelerating from the 1.7% growth rate registered in 2003.
82
Appendix 2
Company No.585467-M
OUTLOOK FOR THE SARAWAK ECONOMY
The following are independent opinions from authoritative sources on the outlook for the Sarawak Economy and
Housing Market for 2004 and beyond. Unless otherwise stated, these organisations have no connection with the
Naim Group or its Subsidiaries. All statements are copyright of their respective originators and are used under
the rule of fair comment.
Sarawak State Government (2004 State Budget Speech dated 8 December 2003)
The world economy is projected to perform mush better in 2004 with the growth in global output estimated 4.1
percent. The US is forecast to post a GDP growth of 2.9 percent while the Euro area is expected to grow by 1.9
percent with Japan growing by 1.4 percent. The newly industrialised Asian economy is expected to grow by 4.2
percent while the developing countries at 5.6 percent.
Sarawak State Government (2004 Market Outlook)
In consonance with the better performance of the national economy, the State is also expected to perform
better in 2004, with projected growth of 6.0 percent in 2004 against 5.0 percent for 2003. The growth of the
State’s GDP in 2004 is expected to be driven by the manufacturing, agriculture, construction and services
sector.
WTW Property Market 2004*
In Kuching the residential subsector is viewed with some optimism.
The oversupply of shophouses in Miri indicates that this subsector will remain stable throughout 2004, while the
establishment of Marina Park as part of the resort development of Miri will create good interest in the
residential subsector.
In Bintulu, the residential subsector is viewed with optimism particularly due to the spin-off effects of the
rejuvenated Bakun Dam project and the commencement of an aluminium plant which will create an influx of
migrant workers into Bintulu.
In Sibu, a stable property market is expected as prices of terraced houses and semi-detached houses in prime
locations shot pass RM200,000 and RM350,000 respectively. Outlook for 2004 remains good with new
developments expanding into new outlying areas.
The industrial sub-sector throughout the state is an issue of mismatch between supply and demand,
particularly for the SMIs, in terms of location and access.
* Note: WTW occasionally act on behalf of the Naim Group in their capacity as Estate Agents and
Property Market Consultants
83
Our Main Areas of Operations
Kuching City
Miri Town
Bintulu Town
Logo
Rationale
Contents
Page
T he logotype displays the word Naim in green,
red and gold, colours which reflect the group's
strengths and capabilities. Green represents
growth, sincerity and fairness, red represents
strength and prosperity, whilst gold represents
excellence and superior quality.
The word Naim is intersected by the apex of a
toroid, a ring-like shape possessing exceptional
strength, stability and integrity. The conjunction of
the golden letter A and the toroid suggests a
dazzling sunrise, predicting a shining long-term
future for the group.
2
Vision & Mission Statements
4
Financial Highlights
6
Share Performance
7
Corporate Information
9
Corporate Structure
10
Organizational Structure
12
Corporate Profile
14
Chairman’s Statement
22
Managing Director’s Review of Operations
34
Board of Directors
40
Management Team
41
Senior Mangement
44
Audit Committee Membership and Report
48
Corporate Governance Statement
62
Statement of Internal Control
63
Human Resource - Our Strongest Assets
64
Corporate Citizenship
65
Social Responsibility
67
Special Initiative - Developing Bumiputra Contractors
68
Commitment to Quality and Value
69
Naim Group In The News
72
The Road to Listing
74
Diary of Group Events
80
Appendix 1 - Outlook for the Malaysian Economy
83
Appendix 2 - Outlook for the Sarawak Economy
85
Financial Statements
130
Analysis of Shareholdings
133
Lists of Properties
Note : Notice of Annual General Meeting and Proxy Form
are attached separately
VISION & MISSION
STATEMENTS
Our Vision
To be the leading home builder and contractor in every
market in which we operate, and in every aspect of our operations,
leading the way in quality, reliability, and value for money.
Our Mission
To provide the finest products and services for our customers.
To provide increasing value and superior returns for our share-holders.
To empower every member of staff to develop their potential
to the maximum.
To be a role-model customer for our suppliers,
sub-contractors and service providers.
To contribute meaningfully
and positively to the community and the
society which nurtures us.
2
Company No.585467-M
3
FINANCIAL
HIGHLIGHTS
Year Ended 31 December
1999
RM'000
2000
RM'000
2001
RM'000
2002
RM'000
2003
RM'000
Revenue
101,009
152,059
183,313
244,098
270,951
Profit Before Taxation
29,527
39,463
39,730
51,554
77,988
Net Profit
23,867
20,197
25,897
31,772
48,483
Total Assets
100,893
144,862
191,583
222,851
567,301
Net Tangible Assets
45,480
61,190
81,170
107,790
380,857
Shareholders' Equity
46,195
61,392
81,289
107,818
352,228
Total Number of Shares
203,425
203,425
203,425
203,425
250,000
Earnings Per Share (sen)
11.73
9.93
12.73
15.62
19.39
Gross Dividend Rate (%) *
2.46
2.46
2.95
2.95
9.00
Net Tangible Assets Per Share (sen)
22.4
30.1
39.9
53.0
152.34
Gearing Ratio
0.06
0.06
0.09
0.07
0.006
Notes:
i.
The financial highlights for the years ended 31 December 1999 to 2003 are presented on a pro-forma basis (as if Naim
Cendera Sdn Bhd (NCSB) and its subsidiaries were part of the Naim Cendera Holdings Group since 1 January 1999.)
ii. The profit in 1999 was exempted from income tax in accordance with the Income Tax (Amendment) Act 1999.
*
4
Based on the gross dividend declared and paid by NCSB of RM5,000,000, RM5,000,000, RM6,000,000 and
RM6,000,000 in respect of the financial years ended 31 December 1999, 2000, 2001, 2002 respectively and the
number of shares assumed in issue of 203,425,000 shares. For 2003, the gross dividend rate is based on the interim
dividend paid of 4.5% per share less tax, the proposed final dividend of 4.5% less tax, and the number of shares assumed
to be in issue, i.e. 250,000,000 shares. The proposed final dividend of 4.5% per share less tax is subject to the approval
of shareholders in the forthcoming Annual General Meeting.
Company No.585467-M
50.0
45.0
80.0
400.0
350.0
300.0
250.0
200.0
5
SHARE
PERFORMANCE
6
CORPORATE
INFORMATION
Company No.585467-M
Board of Directors
Executive Directors
Kueh Hoi Chuang
Independent Non-Executive Directors
Company Secretaries
Kho Teck Hock (MIA 5836)
Bong Siu Lian (MAICSA 7002221)
Registered and Head Office
9th Floor Wisma Naim
2 1/2 Mile, Rock Road, 93200 Kuching, Sarawak
Tel: 082-411667
Fax: 082-233667
E-Mail: cendera@po.jaring.my
Website: www.naimcendera.com
Registrars
Tenaga Koperat Sdn. Bhd.
20th Floor, Plaza Permata
Jalan Kampar, Off Jalan Tun Razak
50400 Kuala Lumpur
Tel: 03-40416522
Fax: 03-40426352
Stock Exchange Listing
Main Board
on 12 September 2003
Sector: Property
Stock Code: 5073
Stock Name: Naim
Incorporation
5 July 2002 in Malaysia
under the Companies Act, 1965
Auditors
KPMG
(Firm No AF0758)
Chartered Accountants
Level 6, Westmoore House
Twin Tower Centre
Rock Road
93200 Kuching, Sarawak
Solicitors
Alvin Chong & Partners Advocates
Lots 176-177 (2nd Floor)
Jalan Song Thian Cheok
93100 Kuching, Sarawak
Principal Bankers
Bumiputra-Commerce Bank Berhad
Ground Floor Lot 1.1 Bangunan Satok
Jalan Satok/Kulas, 93400 Kuching, Sarawak
Malayan Banking Bhd
4th Floor, Crown Towers
88 Jalan Pending
93400 Kuching, Sarawak.
7
CORPORATE INFORMATIONS
KUCHING OFFICES
BUSINESS DEVELOPMENT DEPARTMENT
Lot 2672 & 2673, Level 7, Westmoore House
2 1/2 mile, Rock Road 93200 Kuching
NAIM CENDERA
HOLDINGS BERHAD
HEADQUARTERS
9th floor, Wisma Naim 2 1/2 mile,
Rock Road 93200 Kuching, Sarawak.
ACCOUNTS / FINANCE DEPARTMENT
Sublot 12, 2nd floor, Lot 2678 Block 10,
2 1/2 mile, Rock Road 93200 Kuching.
CONSTRUCTION / Q.S. DEPARTMENT
Sublot 12, 3rd floor, Lot 2678 Block 10
PROPERTY DIVISION
Sublot 1, Lot 676, 1st floor, Eastmoore Centre,
MIRI OFFICES
Ground Floor, Lot 889, 9 MCLD, Miri Waterfront
Commercial Centre 98000 Miri, Sarawak.
Lot 5906-5911, Block 10, Desa Pujut Shoplot
Bandar Baru Permyjaya P.O. Box 369
98107 Lutong, Miri, Sarawak.
BINTULU OFFICE
Sublot 2, Lot 220, B1-32, Batu 6 Jalan Bintulu-Sibu
P.O. Box 163 97000 Bintulu, Sarawak.
8
FINANCIAL STATEMENTS
86
91
92
93
94
96
97
98
101
130
133
Directors’ Report
Statement by Directors
Statutory Declaration
Report of the Auditors
Balance Sheets
Income Statements
Statement of Changes in Equity
Cash Flow Statements
Notes to the Financial Statements
Analysis of Shareholdings
List of Properties
85
DIRECTORS’ REPORT
for the year ended 31 December 2003
The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the
Company for the year ended 31 December 2003.
Principal activities
The Company commenced operations during the financial year and is principally engaged in investment holding and
provision of management services to subsidiaries. The principal activities of the subsidiaries, which were acquired
on 25 July 2003, are as stated in Note 3 to the financial statements. There have been no significant changes in the
nature of the activities of the subsidiaries since acquisition.
Results
Net profit for the year
Group
RM
Company
RM
24,246,533
========
10,924,423
========
Dividend
Since the end of the previous financial year, the Company paid an interim dividend of 4.5% per share less tax at 28%
totalling RM8,100,000 in respect of the year ended 31 December 2003 on 19 December 2003.
The final dividend recommended by the Directors in respect of the year ended 31 December 2003 is 4.5% per share
less tax at 28% totalling RM8,100,000.
Reserves and provisions
There were no material transfers to or from reserves and provisions during the year except as disclosed in the
financial statements.
Directors of the Company
Directors who served since the date of the last report are:
Datuk Abdul Hamed Bin Haji Sepawi (appointed on 25.7.2003)
Datuk Hasmi Bin Hasnan (appointed on 25.7.2003)
Ir. Suyanto Bin Osman (appointed on 25.7.2003)
William Wei How Sieng (appointed on 25.7.2003)
Kueh Hoi Chuang (appointed on 25.7.2003)
Abang Hasni Bin Abang Hasnan (appointed on 25.7.2003)
YB Tuan Haji Hamden Bin Haji Ahmad (appointed on 25.7.2003)
Ir. Abang Jemat Bin Abang Bujang (appointed on 25.7.2003)
Dr. Sharifuddin Bin Abdul Wahab (appointed on 25.7.2003)
Cheng Ah Teck @ Cheng Yik Lai (resigned on 25.7.2003)
Lau Hui Kwong (resigned on 25.7.2003)
Lee Siaw Wai (resigned on 25.7.2003)
Note :
86
This note does not constitute part of the Director’s Report and is included for readers’ convenience only.
The net profit of RM24,246,533 referred to on this page is the post-acquisition profit covering the period from
25th July to 31st December 2003. For details of pro-forma profit covering the entire year, please refer to “Note
31 - Acquisition of Subsidiaries” on pages 127-129 of this Annual Report.
NAIM CENDERA HOLDINGS BERHAD
Directors of the Company (continued)
The holdings and deemed holdings in the ordinary shares of the Company and of its related corporations (other than
wholly-owned subsidiaries) of those who were Directors at the year end as recorded in the Register of Directors’
Shareholdings are as follows:
At
1.1.2003
Number of ordinary shares of RM1.00 each
At
Bought
Sold
31.12.2003
Shareholdings in the Company in
which Directors have direct interests
Datuk Abdul Hamed
Bin Haji Sepawi
Kueh Hoi Chuang
-
18,881,900
28,297,850
250,000
300,000
300,000
250,000
100,000
100,000
100,000
5,231,900
115,000
140,000
155,900
250,000
100,000
75,000
-
13,650,000
28,297,850
135,000
160,000
144,100
25,000
100,000
At
1.1.2003/
Date of
appointment
Bought
Sold
At
31.12.2003
8,000,000
300,000
1,000
1,020,000
700,000
255,000
55,615,700
450,000
-
11,240,000
-
44,375,700
8,000,000
750,000
1,000
1,020,000
700,000
255,000
8,000,000
300,000
1,000
1,020,000
700,000
255,000
74,147,600
450,000
-
12,184,300
-
61,963,300
8,000,000
750,000
1,000
1,020,000
700,000
255,000
Shareholdings in which a Director,
Datuk Abdul Hamed Bin Haji Sepawi,
has deemed interests
The Company
Desa Ilmu Sdn. Bhd.
Naim Citra Sdn. Bhd.
Naim Housing Sdn. Bhd.
Total Reliability Sdn. Bhd.
TR Bricks Sdn. Bhd.
TR Smart Piles Sdn. Bhd.
Datuk Hasmi Bin Hasnan,
The Company
Desa Ilmu Sdn. Bhd.
TR Bricks Sdn. Bhd.
87
DIRECTORS’ REPORT for the year ended 31 December 2003 (continued)
At
1.1.2003/
Date of
appointment
Bought
180,000
45,000
9,265,950
-
Sold
At
31.12.2003
William Wei How Sieng,
The Company
668,400
-
8,597,550
180,000
45,000
Directors’ benefits
Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive
any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by
Directors as shown in the financial statements) by reason of a contract made by the Company or a related
corporation with the Director or with a firm of which the Director is a member, or with a company in which the
Directors has a substantial financial interest, other than certain Directors who have significant financial interests in
companies which traded with certain companies in the Group in the ordinary course of business.
There were no arrangements during and at the end of the year which had the object of enabling Directors of the
Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other
body corporate.
Issue of shares and debentures
During the financial year, the authorised share capital of the Company was increased from RM500,000 to
RM500,000,000 by the creation of 499,500,000 new ordinary shares of RM1.00 each, ranking pari passu in all
respects with the existing ordinary shares of the Company.
In conjunction with the listing of the Company’s share capital on the Main Board of Bursa Malaysia (formerly known
as Kuala Lumpur Stock Exchange) on 12 September 2003, the issued and paid-up share capital of the Company was
increased from RM106,000 to RM250,000,000, as follows:
88
Date of issue
Type of shares
Terms and purpose of issue
Number of shares
25.7.2003
Ordinary shares of
RM1.00 each
Consideration for the acquisition of
Naim Cendera Sdn. Bhd. and its
subsidiaries for RM279,961,920 at an
issue price of approximately RM1.38
per share credited as fully paid-up.
203,319,000
5.9.2003
Ordinary shares of
RM1.00 each
Public issue at RM1.30 per share for
cash.
46,575,000
249,894,000
Option granted over unissued shares
No options were granted to any person to take up unissued shares of the Company during the year.
Other statutory information
Before the financial statements of the Group and of the Company were made out, the Directors took reasonable steps
to ascertain that:
i)
all known bad debts have been written off and adequate provision made for doubtful debts, and
ii)
all current assets have been stated at the lower of cost and net realisable value.
At the date of this report, the Directors are not aware of any circumstances:
i)
that would render the amount written off for bad debts, or the amount of the provision for doubtful debts
in the Group and in the Company inadequate to any substantial extent, or
ii)
that would render the value attributed to the current assets in the Group and in the Company financial
statements misleading, or
iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the
Group and of the Company misleading or inappropriate, or
iv) not otherwise dealt with in this report or the financial statements, that would render any amount stated in
the financial statements of the Group and of the Company misleading.
At the date of this report, there does not exist:
i)
any charge on the assets of the Group and of the Company that has arisen since the end of the financial year
and which secures the liabilities of any other person, or
ii)
any contingent liability in respect of the Group and of the Company that has arisen since the end of the
financial year.
89
DIRECTORS’ REPORT
for the year ended 31 December 2003 (continued)
No contingent liability or other liability of the Group and of the Company has become enforceable, or is likely to
become enforceable within the period of twelve months after the end of the financial year which, in the opinion of
the Directors, will or may substantially affect the ability of the Group and of the Company to meet its obligations as
and when they fall due.
In the opinion of the Directors, except as disclosed in the financial statements, the results of the operations of the
Group and of the Company for the financial year ended 31 December 2003 have not been substantially affected by
any item, transaction or event of a material and unusual nature nor has any such item, transaction or event occurred
in the interval between the end of that financial year and the date of this report.
Auditors
The auditors, Messrs KPMG, have indicated their willingness to accept re-appointment.
Signed in accordance with a resolution of the Directors:
Datuk Abdul Hamed Bin Haji Sepawi
Kuching,
Date: 26 April, 2004
90
STATEMENT
BY DIRECTORS
pursuant to Section 169(15) of the Companies Act, 1965
In the opinion of the Directors, the financial statements set out on pages 94 to 129 are drawn up in accordance with
the provisions of the Companies Act, 1965 and applicable approved accounting standards in Malaysia, so as to give
a true and fair view of the state of affairs of the Group and of the Company at 31 December 2003 and of the results
of their operations and cash flows for the year ended on that date.
Signed in accordance with a resolution of the Directors:
Datuk Abdul Hamed Bin Haji Sepawi
Kuching,
91
STATUTORY
DECLARATION
pursuant to Section 169(16) of the Companies Act, 1965
I, Kho Teck Hock, the officer primarily responsible for the financial management of Naim Cendera Holdings Berhad,
do solemnly and sincerely declare that the financial statements set out on pages 94 to 129 are, to the best of my
knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true, and
by virtue of the provisions of the Statutory Declarations Act, 1960.
Subscribed and solemnly declared by the abovenamed
in Kuching in the State of Sarawak
on 26 April, 2004
Kho Teck Hock
Before me:
LIEW SHAU JIN
Commissioner For Oaths,
Lo 173, 1st Floor, Section 49,
Jalan Chan Chin Ann,
92
REPORT OF
THE AUDITORS
to the members of Naim Cendera Holdings Berhad
We have audited the financial statements set out on pages 94 to 129. The preparation of the financial statements is
the responsibility of the Company’s Directors. Our responsibility is to express an opinion on the financial statements
based on our audit.
We have conducted our audit in accordance with approved Standards on Auditing in Malaysia. These standards
require that we plan and perform the audit to obtain all the information and explanations, which we consider
necessary to provide us with evidence to give reasonable assurance that the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence relevant to the amounts and
disclosures in the financial statements. An audit also includes an assessment of the accounting principles used and
significant estimates made by the Directors as well as evaluating the overall adequacy of the presentation of
information in the financial statements. We believe our audit provides a reasonable basis for our opinion.
In our opinion:
(a) the financial statements are properly drawn up in accordance with the provisions of the Companies Act, 1965
and applicable approved accounting standards in Malaysia so as to give a true and fair view of:
i.
the state of affairs of the Group and of the Company at 31 December 2003 and of the results of their
operations and cash flows for the year ended on that date; and
ii.
the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements
of the Group and of the Company.
and
(b) the accounting and other records and the registers required by the Companies Act, 1965 to be kept by the
Company and its subsidiaries have been properly kept in accordance with the provisions of the said Act.
We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company’s
financial statements are in form and content appropriate and proper for the purposes of the preparation of the
consolidated financial statements and we have received satisfactory information and explanations required by us for
those purposes.
The audit reports on the financial statements of the subsidiaries were not subject to any qualification and did not
include any comment made under subsection (3) of Section 174 of the Act.
KPMG
Firm Number: AF 0758
Chartered Accountants
Chin Chee Kong
Partner
Approval Number: 1481/1/05 (J)
Kuching,
93
BALANCE SHEETS
Note
Group
2003
RM
Property, plant and equipment
2
39,878,521
-
-
Investment in subsidiaries
3
-
279,961,920
-
Investment in associate
4
1,621,826
-
-
Investment in jointly controlled
entities
5
565,829
-
-
Other investments
6
474,101
-
-
Land held for development
7
247,789,882
-
-
Deferred tax assets
8
21,000
-
-
9
10
11
12
13
4,808,863
73,067,177
68,367,500
38,269
2,463,981
128,204,442
___________
276,950,232
-----------------
197,055
3,700,000
56,650,379
___________
60,547,434
-----------------
99,389
___________
99,389
-----------------
77,507,488
533,374
1,121,344
___________
79,162,206
-----------------
553,739
942,035
108,000
___________
1,603,774
-----------------
4,362
___________
4,362
-----------------
197,788,026
___________
488,139,185
=========
58,943,660
___________
338,905,580
=========
95,027
___________
95,027
=========
Current assets
Inventories
Properties under development
Trade and other receivables
Amount due from subsidiaries
Amount due from an associate
Tax recoverable
Deposits, cash and bank balances
Current liabilities
Trade and other payables
Amount due to subsidiaries
Borrowings - secured
Taxation
Net current assets
94
at 31 December 2003
14
15
12
16
Company
2003
RM
2002
RM
Balance sheets at 31 December 2003 (continued)
Note
Group
2003
RM
Company
2003
RM
2002
RM
Financed by:
Capital and reserves
Share capital
Share premium
Retained profits/
(Accumulated losses)
17
250,000,000
86,092,130
250,000,000
86,092,130
106,000
-
18
16,135,560
___________
352,227,690
2,813,450
___________
338,905,580
(10,973)
___________
95,027
Reserve on consolidation
19
28,629,536
-
-
Minority shareholders’ interests
20
28,539,927
-
-
16
8
1,640,032
77,102,000
___________
488,139,185
=========
___________
338,905,580
=========
___________
95,027
=========
Long term and deferred liabilities
Deferred tax liabilities
The financial statements were approved and authorised for issue by the Board of Directors on 26 April 2004.
The notes set out on pages 101 to 129 form an integral part of, and should be read in conjunction with, these
95
INCOME STATEMENTS
Note
Revenue
Cost of sales/operations
21
21
Gross profit
Other operating income
Distribution cost
Administrative expenses
Group
2003
RM
Company
2003
RM
2002
RM
143,925,351
(97,637,270)
___________
46,288,081
15,410,926
___________
15,410,926
___________
-
3,074
(237,577)
___________
15,176,423
(10,973)
___________
(10,973)
Operating profit/(loss)
21
569,696
(56,722)
(9,684,056)
___________
37,116,999
Income from investments
Reserves on consolidation
recognised
Interest expense
23
336,728
-
-
19
2,561,609
(250,484)
___________
39,764,852
132,243
___________
15,176,423
-
___________
(10,973)
-
Profit/(Loss) before taxation
446,355
___________
40,343,450
___________
15,176,423
___________
(10,973)
Tax - Company and subsidiaries
- associate
- jointly controlled entities
(12,311,152)
(2,027)
(125,000)
(4,252,000)
-
-
(12,438,179)
___________
(4,252,000)
___________
___________
27,905,271
10,924,423
(10,973)
(3,658,738)
___________
24,246,533
=========
___________
10,924,423
=========
___________
(10,973)
=========
Share of profit of an associate
Share of profit of jointly
controlled entities
Tax expense
24
Profit/(Loss) after taxation
Minority interests
Net profit/(loss) for the year
Basic earnings per ordinary share (sen)
25
23.4
=========
Dividends per ordinary share - net (sen)
26
6.5
=========
96
STATEMENT OF
CHANGES IN EQUITY
Note
Share
capital
RM
Nondistributable
Share
premium
RM
Distributable
(Accumulated
losses)/
Retained profits
RM
Total
RM
Group
At 1 January 2003
Issue of shares
Share issue expenses
Dividend
26
At 31 December 2003
106,000
-
(10,973)
95,027
249,894,000
___________
250,000,000
=========
Note 17
90,615,420
(4,523,290)
___________
86,092,130
=========
24,246,533
(8,100,000)
___________
16,135,560
=========
340,509,420
(4,523,290)
24,246,533
(8,100,000)
___________
352,227,690
=========
2
-
-
2
105,998
___________
106,000
___________
-
(10,973)
___________
(10,973)
105,998
(10,973)
___________
95,027
249,894,000
___________
250,000,000
=========
Note 17
90,615,420
(4,523,290)
___________
86,092,130
=========
10,924,423
(8,100,000)
___________
2,813,450
=========
Note 18
340,509,420
(4,523,290)
10,924,423
(8,100,000)
___________
338,905,580
=========
Company
At 5 July 2002
(Date of incorporation)
Issue of shares
Net loss for the year
At 31 December 2002
Issue of shares
Dividend
At 31 December 2003
26
97
CASH FLOW
STATEMENTS
Group
2003
RM
2003
RM
Company
40,343,450
15,176,423
(10,973)
2,369,727
(6,432)
(14,800,000)
-
152,558
-
-
(44,083)
345,960
(821,222)
(490,926)
-
(2,561,609)
(132,243)
-
-
(446,355)
___________
___________
___________
39,199,751
(114,503)
(10,973)
632,095
(5,860,077)
24,215,474
105,640
192,156
___________
(197,055)
549,377
(2,757,965)
___________
4,362
___________
58,485,039
(2,520,146)
(6,611)
(14,343,178)
(95,476)
491,319
___________
(4,144,000)
490,926
___________
___________
44,537,704
=========
(6,173,220)
=========
(6,611)
=========
2002
RM
Cash flows from operating activities
Adjustments for:
Depreciation
Dividend income
Loss on disposal of property,
plant and equipment
Gain on disposal of quoted
shares
Interest expense
Interest income
recognised
Share of profit in an associate
controlled entities
Operating profit/(loss) before working
capital changes
(Increase)/Decrease in working capital:
Inventories
Amount due from/to subsidiaries
Amount due from an associate
Cash generated from/(used in)
operations
Income taxes paid
Interest paid
Interest received
Net cash generated from/(used in)
operating activities
98
Cash flow statements for the year ended 31 December 2003 (continued)
Group
2003
RM
Company
2003
RM
2002
RM
Cash flows from investing activities
Acquisition of subsidiaries, net of
cash acquired (Note 31)
Increase in deposits pledged to
licensed banks
Dividends received
Interest received
Proceeds from disposal of property,
plant and equipment
Proceeds from disposal of other
investments
Purchase of other investments
Purchase of property, plant and
equipment [Note (i)]
Net cash generated from investing
activities
65,021,695
-
-
(3,747,293)
6,432
329,903
14,800,000
-
-
101,035
-
-
112,818
(7,151)
-
-
(561,835)
___________
___________
___________
61,255,604
=========
14,800,000
=========
=========
(6,770,013)
(91,261)
(250,484)
60,547,500
(4,523,290)
(8,100,000)
60,547,500
(4,523,290)
(8,100,000)
106,000
-
(3,688,000)
-
-
(18,560,000)
___________
___________
___________
18,564,452
=========
47,924,210
=========
106,000
=========
124,357,760
56,550,990
99,389
99,389
___________
99,389
___________
___________
124,457,149
=========
56,650,379
=========
99,389
=========
Cash flows from financing activities
Repayment of hire purchase principal
Repayments of term loans
Interest paid
Proceeds from issuance of shares
Dividends paid by the Company
Dividends paid to minority
shareholders by indirect subsidiaries
Special dividend paid by the direct
subsidiary to its former shareholders
Net cash generated from financing
activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning
of year [Note (ii)]
Cash and cash equivalents at end of year
[Note (ii)]
99
CASH FLOW STATEMENTS
for the year ended 31 December 2003 (continued)
Notes
(i)
Purchase of property, plant and equipment
During the year, the Group acquired property, plant and equipment with an aggregate cost of RM1,661,835, of
which RM1,100,000 was financed by hire purchase loans while the balance was paid for in cash.
(ii) Cash and cash equivalents
Cash and cash equivalents included in the cash flow statements comprise the following balance sheet amounts:
Group
2003
RM
Fixed deposits (excluding fixed deposits
pledged)
Cash and bank balances
92,060,302
32,396,847
__________
124,457,149
=========
Company
2003
RM
2002
RM
52,234,906
4,415,473
_________
56,650,379
========
99,389
_________
99,389
========
100
NOTES TO THE
FINANCIAL STATEMENTS
1.
Summary of significant accounting policies
The following accounting policies are adopted by the Group and the Company and are consistent with those
adopted in previous years except for the adoption of the following:
(i)
MASB 25, Income Taxes;
(ii)
MASB 27, Borrowing Costs; and
(iii)
MASB 29, Employee Benefits.
Apart from the new policies and extended disclosures where required by these new standards, the adoption
thereof has no effect on the financial statements as the previous policies were in line with these standards.
(a)
Basis of accounting
The financial statements of the Group and of the Company are prepared on the historical cost basis,
except as disclosed in the notes to the financial statements and in compliance with the provisions of
the Companies Act, 1965 and applicable approved accounting standards in Malaysia.
(b)
Basis of consolidation
Subsidiaries are those enterprises controlled by the Company. Control exists when the Company has
the power, directly or indirectly to govern the financial and operating policies of an enterprise so as
to obtain benefits from its activities. The financial statements of subsidiaries are included in the
consolidated financial statements from the date that control effectively commences until the date that
control effectively ceases. Subsidiaries are consolidated using the acquisition method of accounting.
A subsidiary is excluded from consolidation when either control is intended to be temporary if the
subsidiary is acquired and held exclusively with a view of its subsequent disposal in the near future
and it has not previously been consolidated or it operates under severe long term restrictions which
significantly impair its ability to transfer funds to the Company. Subsidiaries excluded on these
grounds are accounted for as investments.
Under the acquisition method of accounting, the results of subsidiaries acquired or disposed of
during the year are included from the date of acquisition or up to the date of disposal. At the date of
acquisition, the fair values of the subsidiaries’ net assets are determined and these values are
reflected in the Group financial statements. The difference between the acquisition cost and the fair
values of the subsidiaries’ net assets is reflected as goodwill or reserve on consolidation as appropriate.
Intragroup transactions and balances and the resulting unrealised profits are eliminated on
consolidation. Unrealised losses resulting from intragroup transactions are also eliminated unless cost
cannot be recovered.
101
NOTES TO THE FINANCIAL STATEMENTS
1.
(continued)
Summary of significant accounting policies (continued)
(c)
Associates
Associates are those enterprises in which the Group has significant influence, but not control, over the
financial and operating policies.
The consolidated financial statements include the total recognised gains and losses of associates on
an equity accounted basis from the date that significant influence effectively commences until the date
that significant influence effectively ceases.
Unrealised profits arising on transactions between the Group and its associates which are included in
the carrying amount of the related assets and liabilities are eliminated partially to the extent of the
Group’s interests in the associates. Unrealised losses on such transactions are also eliminated
partially unless cost cannot be recovered.
Goodwill on acquisition is calculated based on the fair value of net assets acquired.
(d)
Joint venture
A joint venture is a contractual agreement whereby the Group and other parties have joint control over
an economic activity.
In respect of its interest in jointly controlled entities, the Group uses the equity method to account for
its interest.
Unrealised profits or losses arising from transactions between the Group and its joint venturers are
recognised only to the extent of that portion of the gain or loss which is attributable to the interests of
the other venturers. Unrealised losses are recognised in full when the transaction provides evidence
of a reduction in the net realisable value of current assets or an impairment loss.
(e)
Property, plant and equipment are stated at cost less accumulated depreciation.
Property, plant and equipment retired from active use and held for disposal are stated at the carrying
amount at the date when the asset is retired from active use, less impairment losses, if any.
Depreciation
Leasehold land is amortised equally over its remaining lease terms. Other property, plant and
equipment are depreciated on a straight line basis to write off the costs of the assets over the term of
their estimated useful lives at the following principal annual rates:
Buildings
Furniture and fittings
Motor vehicles
Office and factory equipment
Plant and machinery
102
2% - 10%
10% - 50%
20%
10% - 50%
10% - 20%
1.
(f)
Investments
Investments in subsidiaries, associates and jointly controlled entities are stated at cost in the Company,
less impairment loss where applicable.
Long-term investments other than in subsidiaries, associates and jointly controlled entities are stated
at cost. An allowance is made when the Directors are of the view that there is a diminution in their
value which is other than temporary.
(g)
Land held for development is stated at cost and comprises land on which no significant development
work has been undertaken. When significant development work commences on such land, the land
is transferred to properties under development.
(h)
Goodwill and reserve on consolidation
Goodwill represents the excess of the cost of acquisition over the fair values of the net identifiable
assets acquired and is stated at cost less accumulated amortisation.
In respect of associates and jointly controlled entities, the carrying amount of goodwill is included in
the carrying amount of the investment in the associates or jointly controlled entities.
Reserve on consolidation represents the excess of the fair values of the net identifiable assets acquired
over the cost of acquisition.
Goodwill/Reserve on consolidation is amortised/recognised in the income statement over five years,
subject, in the case of goodwill, to annual reviews for any impairment in its carrying value.
(i)
Inventories
(i)
Developed properties
Completed properties held for resale are stated at the lower of cost and net realisable value.
Cost is determined on a specific identification basis and includes land, all direct building costs
and other related development costs.
(ii)
(j)
Other Inventories
Raw materials, manufactured inventories, consumables, building materials and botanical
plants are stated at the lower of cost and net realisable value with weighted average cost being
the basis for cost. For manufactured inventories, cost consists of materials, direct labour and
an appropriate proportion of fixed and variable production overheads.
Properties under development comprising land and development expenditure are stated at cost plus
attributable profit less foreseeable losses, net of progress billings. Development expenditure includes
interest expense on loans and advances utilised to finance on-going development.
103
1.
(continued)
(k)
Trade and other receivables are stated at cost less allowance for doubtful debts.
(l)
Amount due from contract customers
Amount due from contract customers on construction contracts is stated at cost plus attributable
profits less foreseeable losses and less progress billings. Cost includes all direct construction costs and
other related costs. Where progress billings exceed the aggregate amount due from contract
customers plus attributable profits less foreseeable losses, the net credit balance on all such contracts
is shown in trade and other payables as amount due to contract customers.
(m)
Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, balances and deposits with banks and highly
liquid investments which have an insignificant risk of changes in value. For the purpose of the cash
flow statement, cash and cash equivalents are presented net of bank overdrafts and pledged deposits.
(n)
Impairment
The carrying amount of the Group’s assets, other than inventories [refer Note 1(i)], deferred tax assets
[refer Note 1(r)], assets arising from construction contracts and financial assets (except investments in
subsidiaries, associates and jointly controlled entities), are reviewed at each balance sheet date to
determine whether there is any indication of impairment. If such an indication exists, the asset’s
recoverable amounts is estimated. An impairment loss is recognised whenever the carrying amount
of an asset or the cash-generating unit to which it belongs exceeds its recoverable amount. An
impairment loss is charged to the income statement.
The recoverable amount is the greater of the asset’s net selling price and its value in use. In assessing
value in use, estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the
asset. For an asset that does not generate largely independent cash inflows, the recoverable amount
is determined for the cash-generating unit to which the asset belongs.
An impairment loss in respect of goodwill is not reversed unless the loss was caused by a specific
external event of an exceptional nature that is not expected to recur and subsequent external events
have occurred that reverses the effect of that event.
In respect of other assets, an impairment loss is reversed if there has been a change in the estimates
used to determine the recoverable amount and is reversed only to the extent that the asset’s carrying
amount does not exceed the carrying amount that would have determined, net of depreciation or
amortisation, if no impairment loss has been recognised. The reversal is recognised in the income
statement.
104
1.
(o)
Liabilities
Borrowings and trade and other payables are stated at cost.
(p)
Hire purchase loans
Property, plant and equipment acquired using hire purchase loans are capitalised and depreciated in
accordance with Note 1(e). Outstanding hire purchase instalments after deducting interest yet to fall
due are disclosed as borrowings in the balance sheet. Hire purchase interest is charged to the income
statement over the loan tenure using the “sum-of-digit” method.
(q)
Capitalisation of borrowing costs
Borrowing costs incurred on properties under development and gross amount due from contract
customers are capitalised. Capitalisation of borrowing costs will cease when the assets are ready for
their intended use or when the construction contracts have been completed.
The capitalisation rate used to determine the amount of borrowing costs eligible for capitalisation is
the weighted average of the borrowing costs applicable to the Group’s borrowings that are
outstanding during the year, other than borrowings made specifically for the purpose of financing
a specific property under development or gross amount due from contract customers, in which case
the actual borrowing cost incurred on that borrowing less any investment income on the temporary
investment of that borrowing will be capitalised.
Capitalisation of borrowing costs is suspended during extended periods in which active development
is interrupted.
(r)
Income tax
Tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in
the income statement except to the extent that it relates to items recognised directly in equity, in which
case it is recognised in equity.
Current tax expense is the expected tax payable on the taxable income for the year, using tax rates
enacted or substantially enacted at the balance sheet date, and any adjustment to tax payable in
respect of previous years.
Deferred tax is provided, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements. Temporary
differences are not recognised for goodwill not deductible for tax purposes and the initial recognition
of assets or liabilities that at the time of the transaction affects neither accounting nor taxable profit.
The amount of deferred tax provided is based on the expected manner of realisation or settlement of
the carrying amount of assets and liabilities, using tax rates enacted or substantially enacted at the
balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will
be available against which the asset can be utilised.
105
1.
(continued)
(s)
Employee benefits
Obligations for contributions to defined contribution plans are recognised as an expense in the income
statement as incurred.
(t)
Income recognition
(i)
Construction contracts
Revenue from long-term fixed price construction contracts is recognised on the percentage of
completion method, by reference to the proportion that contract costs incurred for contract
work performed to-date that reflect work performed bear to the total estimated contract costs.
When the outcome of a construction contract cannot be estimated reliably, revenue is
recognised only to the extent of contract costs incurred that is probable of recovery and
contract costs are recognised as an expense in the period in which they are incurred.
An expected loss on a contract is recognised immediately in the income statement.
(ii)
Property development
Profit from property development is recognised using the percentage of completion method on
properties sold, by reference to the proportion that development costs incurred for
development work performed to date that reflect work performed bear to the total estimated
development costs. Where foreseeable losses are anticipated, full provision for these losses is
made in the financial statements.
(iii)
Sale of goods
Revenue from sale of goods is measured at the fair value of the consideration receivable and
is recognised in the income statement when the significant risks and rewards of ownership
have been transferred to the buyers.
(iv)
Dividend income
Dividend income is recognised when the right to receive payment is established.
(v)
Interest income
Interest income is recognised in the income statement as it accrues, taking into account the
effective yield on the assets.
(vi)
Management fees
Income from provision of management services to subsidiaries is recognised as it accrues, at
agreed rates.
(u)
Interest expenses
All interest incurred in connection with borrowings, other than those capitalised in accordance
with Note 1(q), are expensed as incurred.
106
2. Property, plant and equipment
________________________________Outright purchase________________________________
Long-term Short-term
Furniture
Office and
leasehold leasehold
and
Motor
factory
Plant and
land
land
Buildings
fittings
vehicles equipment machinery
Group
RM
RM
RM
RM
RM
RM
RM
Cost
Opening
balance
Acquisition of
subsidiaries
Additions
Disposals
Transfers
Closing balance
Depreciation
Opening
balance
Acquisition of
subsidiaries
Charge for
the year
Disposals
Transfers
Closing balance
Net book value
At
31 December
2003
-
-
-
-
-
-
-
Under hire purchase
Motor
vehicles
RM
Plant and
machinery
RM
-
Total
RM
-
-
18,454,133 3,851,806 5,931,081 2,147,789 2,342,668 3,094,377 5,624,443
5,699,745 7,765,111
85,326
20,942
140,112
348,228
88,000
108,498
83,987
786,742
(17,501)
- ( 29,041) (314,800)
( 18,739)
- 4,479,036
- 7,427,711
(4,479,036) (7,427,711)
________________________________________________________________________________________________________
18,521,958 3,872,748 6,071,193 2,466,976 6,594,904 3,184,136 13,136,141
2,007,451
337,400
======================================================================================
54,911,153
1,661,835
( 380,081)
__________
56,192,907
========
-
-
-
-
-
-
-
-
176,388
238,653
475,638
982,579
1,873,532
1,614,468
3,881,642
2,501,463
-
-
2,326,784 14,071,147
295,186
83,106
62,539
134,485
86,566
206,078
361,769
498,738
641,260
( 4,938) ( 116,778)
(3,312)
(1,460)
- 1,985,953
- 2,804,093
(1,985,953) (2,804,093)
________________________________________________________________________________________________________
471,574
321,759
538,177 1,112,126 3,829,273 1,817,234 7,047,504
1,012,788
163,951
======================================================================================
2,369,727
(126,488)
__________
16,314,386
========
18,050,384 3,550,989 5,533,016 1,354,850 2,765,631 1,366,902 6,088,637
994,663
173,449 39,878,521
====================================================================================== ========
Accumulated depreciation above includes the accumulated depreciation of Naim Cendera Sdn. Bhd. and its subsidiaries prior
to acquisition by the Company on 25 July 2003.
The Group has nineteen parcels of long-term leasehold land with lease terms expiring between the years 2054 and 2062. It
also has four parcels of short-term leasehold land with lease term expiring between the years 2038 and 2052. The title to one
parcel of long-term leasehold land and the building thereon costing RM810,572 and the titles to another five parcels of
long-term leasehold land costing RM1,343,361 have yet to be issued by the relevant authority. Three parcels of long term
leasehold land costing RM16,747,000 have only been issued provisional titles by the relevant authorities. In addition, the
strata titles to two buildings are in the process of being obtained from the authorities.
A parcel of long-term leasehold land and two parcels of short-term leasehold land and the buildings thereon, costing
RM4,103,467, are charged to banks to secure banking facilities granted (Note 16).
107
2.
(continued)
Property, plant and equipment (continued)
Depreciation charge for the year is allocated as follows:
Group
2003
RM
Income statements (Note 21)
Properties under development (Note 10)
Construction costs (Note 11)
3.
1,802,804
312,906
254,017
__________
2,369,727
========
Investment in subsidiaries
Company
Unquoted shares - at cost
2003
RM
2002
RM
279,961,920
=========
=========
Country of
incorporation
Effective
ownership
interest
2003
%
Subsidiaries
Naim Cendera
Sdn. Bhd.
Property developer,
civil and building
contractor
Malaysia
100
Property developer,
civil and building
contractor
Malaysia
51
Desa Ilmu Sdn. Bhd.
(formerly known as
Custodev Tiga
Sdn. Bhd.)
Malaysia
60
Construction
contractor
Malaysia
60
Earthwork
contractor and
rental of machinery
Malaysia
100
Subsidiaries of Naim Cendera Sdn. Bhd.
Total Reliability
Sdn. Bhd.
TR Earthwork Sdn. Bhd.
108
3.
Investment in subsidiaries (continued)
Subsidiaries
TR Smart Piles
Sdn. Bhd.
Country of
incorporation
Effective
ownership
interest
2003
%
Manufacturing and sale
of reinforced concrete piles
Malaysia
51
TR Bricks Sdn. Bhd.
Manufacturing
and sale of bricks
Malaysia
45
TR Green Sdn. Bhd.
Contractor for
landscaping services
Malaysia
100
Naim Cendera Dua
Sdn. Bhd.
Trading of cement,
steel bar and wire
Malaysia
100
Naim Cendera Tujuh
Sdn. Bhd.
Dormant
Malaysia
100
Naim Cendera Lapan
Sdn. Bhd.
Dormant
Malaysia
100
Naim Commercial
Sdn. Bhd.
Dormant
Malaysia
100
Naim Realty Sdn. Bhd.
Dormant
Malaysia
100
Naim Management
Sdn. Bhd.
Dormant
Malaysia
100
Khidmat Mantap Sdn. Bhd.
Dormant
Malaysia
100
Dataran Wangsa Sdn. Bhd.
Dormant
Malaysia
100
Yakin Jelas Sdn. Bhd.
Dormant
Malaysia
100
Dormant
Malaysia
70.6
109
4.
(continued)
Investment in associate - Group
2003
RM
Unquoted shares, at cost
Share of post acquisition reserves
1,491,610
130,216
__________
1,621,826
========
Represented by:
Group’s share of net assets
1,621,826
========
Details of the associate are as follows:
Associate
TR Concrete Sdn. Bhd.
Principal
activity
Country of
incorporation
Group’s effective
equity interest
2003
%
Manufacturing
and sale of
premix concrete
Malaysia
17.85 *
* The Group’s equity interest in TR Concrete Sdn. Bhd. is held through a 51% owned subsidiary, Total
Reliability Sdn. Bhd.
5.
Investment in jointly controlled entities - Group
The Group’s interest in the assets and liabilities, revenue and expenses of jointly controlled entities are
as follows:
2003
RM
Long-term assets
Current assets
Current liabilities
Long-term liabilities
Net assets
Income
Expenses
Share of profit
less : Tax expenses
110
90,906
6,279,490
(3,322,216)
(2,482,351
__________
565,829
========
13,045,383
(12,599,028)
__________
446,355
125,000
__________
321,351
========
5.
Investment in jointly controlled entities - Group (continued)
Details of the jointly controlled entities are as follows:
Name
Konsortium Javel Naim Cendera
Naim-PW JV
PPES Works – Naim Cendera JV
6.
Principal
activities
Proportion of
ownership
interest
2003
%
Construction contractor
50
51
45
Other investments - Group
2003
RM
At cost :
Quoted shares,
Unit trusts
Unquoted shares,
318,876
155,215
10
___________
474,101
=========
The market value of the quoted shares and unit trusts are shown in Note 30.
7.
Land held for development - Group
2003
RM
Land - at cost
Long-term leasehold
Short-term leasehold
Freehold
245,585,305
1,989,828
214,749
___________
247,789,882
=========
Included in the leasehold land are three parcels of land costing RM104,895,000 which are charged to banks
to secure banking facilities granted to certain subsidiaries (Note 16).
The lease terms of the Group’s long-term leasehold land expire between the years 2055 and 2063 while that
of the short term leasehold land, in the year 2052.
Three parcels of freehold land of a subsidiary are held by a Director in trust for the subsidiary.
111
8.
(continued)
Deferred tax
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets
against current tax liabilities and when the deferred taxes relate to the same taxation authority. The amounts,
determined after appropriate offsetting, are as follows:
Group
Acquisition
of
subsidiaries
RM
(Charged)/
Credited to
income
statement
(Note 24)
RM
At
31.12.2003
RM
=========
=========
21,000
=========
21,000
=========
___________
=========
(43,900)
(77,004,000)
___________
(77,047,900)
=========
(205,100)
89,000
62,000
___________
(54,100)
=========
(249,000)
89,000
(76,942,000)
___________
(77,102,000)
=========
At
1.1.2003
RM
Deferred tax assets
Property, plant and
equipment
Deferred tax liabilities
Property, plant
and equipment
Allowances
Fair value adjustments
Unrecognised deferred tax assets
The tax effects of the following temporary differences have not been recognised in the financial statements
of the Group:
2003
RM
Unabsorbed capital allowances
Unutilised tax losses
4,000
141,000
_________
145,000
========
The unutilised tax losses and deductible temporary differences do not expire under current tax legislation.
The deferred tax assets of RM41,000 arising from the above temporary differences have not been recognised
in the financial statements because it is not probable that future taxable profit will be available against which
the affected subsidiaries can utilise the benefits.
112
9.
Inventories - Group
2003
RM
At cost:
Developed properties
Building materials
Raw materials
Manufactured inventories
Consumables
Others
10.
665,796
1,274,837
71,728
2,331,240
350,516
114,746
____________
4,808,863
==========
Properties under development - Group
2003
RM
Land and development costs
Attributable profits
Progress billings
255,646,421
71,868,803
____________
327,515,224
(254,448,047)
____________
73,067,177
==========
The land and development costs, attributable profits and progress billings above include balances of Naim
Cendera Sdn. Bhd. and its subsidiaries prior to acquisition by the Company on 25 July 2003.
Certain land of the Group costing RM779,000 is charged to banks to secure banking facilities granted
(Note 16).
Additions to development costs of the Group during the year include:
2003
RM
Depreciation (Note 2)
Directors’ remuneration
Interest expense
Hiring of equipment
Rental of premises
312,906
170,505
44,530
369,134
46,431
==========
113
11.
(continued)
Group
2003
RM
Trade receivables (including progress
billings receivable)
Amount due from contract customers
Deposits
Prepayments
Other receivables
57,168,469
5,095,373
1,261,090
986,635
3,855,933
___________
68,367,500
=========
Company
2003
RM
197,055
___________
197,055
=========
2002
RM
___________
=========
Amount due from contract customers - Group
2003
RM
Aggregate costs incurred to date
Attributable profits
Progress billings
Amount due to contract customers reclassified to
trade and other payables (Note 15)
177,226,473
56,133,581
____________
233,360,054
(241,016,139)
____________
( 7,656,085)
12,751,458
____________
5,095,373
==========
The aggregate costs incurred to date, attributable profits and progress billings above include the balances of
Naim Cendera Sdn. Bhd. and its subsidiaries prior to acquisition by the Company on 25 July 2003.
Additions to aggregate costs incurred
during the year include:
Directors’ remuneration
Hiring of equipment
Interest expenses
Rental of premises
114
254,017
165,744
833,033
50,946
53,450
==========
12.
Amounts due from/to subsidiaries - Company
The amounts due from/to subsidiaries are non-trade in nature, unsecured and interest free.
13.
Amount due from an associate - Group
The amount due from an associate is non-trade in nature, unsecured and interest free.
14.
Deposits, cash and bank balances
Group
2003
RM
Fixed deposits placed with licensed
banks
Cash and bank balances
95,807,595
32,396,847
___________
128,204,442
=========
Company
2003
RM
2002
RM
52,234,906
4,415,473
___________
56,650,379
=========
99,389
___________
99,389
=========
Fixed deposits of the Group amounting to RM3,747,293 are pledged to banks to secure bank guarantee
facilities granted to the Group.
15.
Group
2003
RM
Trade payables
Accruals
Advances from property buyers
Other payables
Amount due to contract customers
(Note 11)
Company
2003
RM
2002
RM
54,054,592
4,368,304
1,182,402
5,150,732
___________
64,756,030
202,500
351,239
___________
553,739
4,362
___________
4,362
12,751,458
___________
77,507,488
=========
___________
553,739
=========
___________
4,362
=========
Included in the trade payables of the Group are retention sums amounting to RM16,177,215.
Included in other payables is an amount owing to a minority shareholder of a subsidiary of RM234,660. The
amount will be settled through transfer of two vacant detached lots from the said subsidiary’s current
housing development projects.
115
16.
(continued)
Group
2003
RM
Current
Term loans
Hire purchase liabilities
182,641
350,733
___________
533,374
___________
Non-current
Term loans
1,261,241
378,791
___________
1,640,032
___________
Total
2,173,406
=========
The Group has three term loans. The first and second term loans are secured by way of a first legal charge
over two parcels of land and buildings of certain subsidiaries (Note 2).The third term loan is secured by way
of a first legal charge over a plot of land and the building thereon (Note 2) and is also jointly and severally
guaranteed by certain directors of a subsidiary.
The Group has an unsecured and four secured overdraft facilities of RM26.9 million, which were not utilised
as at 31 December 2003. Of the secured overdraft facilities, the first is secured in the same manner as the first
term loan mentioned above. The second to fourth are secured on certain parcels of land of the Group and are
guaranteed by certain Directors or by the direct subsidiary, as the case may be.
The Group has a bridging finance facility of RM4.3 million, which was not utilised at 31 December 2003.
The facility is secured on a parcel of land of a subsidiary and guaranteed by a Director of the subsidiary.
Terms and debt repayment schedule
Group
Term loans - interest
variable from 0.50%
to 2.00% per annum
above base lending rate
Hire purchase - interest
fixed at 3.25% to 6.60%
flat per annum
116
Under
1 year
RM
1-2
years
RM
2-5
years
RM
Over 5
years
RM
1,443,882
182,641
196,527
604,426
460,288
729,524
__________
2,173,406
========
350,733
____-_____
533,374
========
184,881
_________
381,408
========
189,221
_________
793,647
========
4,689
_________
464,977
=======
Total
RM
16.
Borrowings – secured (continued)
Hire purchase liabilities are payable as follows:
Group
Less than one year
Between one and two years
Between two and five years
More than five years
17.
Payments
RM
2003
Interest
RM
Principal
RM
385,768
203,762
199,996
4,759
________
794,285
=======
35,035
18,881
10,775
70
________
64,761
=======
350,733
184,881
189,221
4,689
________
729,524
=======
Share capital
Group
2003
RM
Company
2003
RM
2002
RM
Ordinary shares of RM1.00 each
Authorised
Opening balance
Created during the year
Closing balance
Issued and fully paid
Opening balance
Issued during the year
Closing balance
18.
500,000
499,500,000
___________
500,000,000
=========
500,000
499,500,000
___________
500,000,000
=========
500,000
___________
500,000
=========
106,000
249,894,000
___________
250,000,000
=========
106,000
249,894,000
___________
250,000,000
=========
2
105,998
___________
106,000
=========
Retained profits - Company
Subject to agreement by the Inland Revenue Board, the Company has sufficient Section 108 tax credit to
distribute all its retained profits at 31 December 2003 as dividends.
117
19.
(continued)
Reserve on consolidation - Group
2003
RM
Cost
Opening balance
Acquisition of subsidiaries
31,191,145
___________
31,191,145
___________
Closing balance
Recognition
Opening balance
Recognised in the income statement (Note 21)
2,561,609
___________
2,561,609
___________
28,629,536
=========
Closing balance
Net book value
20.
Minority shareholders’ interests - Group
This consists of the minority shareholders’ proportion of share capital and reserves of subsidiaries, net of their
share of subsidiaries’ goodwill on consolidation and amortisation of goodwill charged to minority
shareholders.
21.
Operating profit/(loss)
Revenue
- sale of properties
- contract revenue
- sale of goods
- management fees
- interest income
- dividend income from
subsidiaries
- cost of properties sold
- contract costs recognised
as an expense
- cost of goods sold
118
Group
2003
RM
2003
RM
Company
78,581,348
59,100,569
5,752,508
490,926
120,000
490,926
-
____________
143,925,351
==========
14,800,000
____________
15,410,926
==========
____________
==========
52,279,944
-
-
39,916,949
5,440,377
____________
97,637,270
==========
____________
==========
____________
==========
2002
RM
Group
2003
RM
Company
2003
RM
2002
RM
Operating profit/(loss) is arrived
at after crediting:
recognised (Note 19)
Gain on disposal of quoted shares
Hire of plant and machinery
Income from liquidated and
ascertained damages
Interest on overdue trade balances
Rental of premises
2,561,609
44,083
7,420
-
-
119,600
35,242
27,871
========
========
========
4,099,675
122,600
1,802,804
118,458
1,373,792
10,000
112,500
-
500
-
152,558
108,477
9,584
========
========
========
and after charging:
Allowance for doubtful debts
Audit fee
Directors’ fees
Directors’ other emoluments
Loss on disposal of property,
plant and equipment
Rental of equipment
Rental of premises
The estimated monetary value of Directors’ benefits-in-kind is RM33,717.
Included in the Directors’ other emoluments of the Group is contributions to the Employees Provident Fund
of RM182,793.
22.
Employee information
Group
2003
RM
Staff costs
5,601,811
========
Company
2003
RM
========
2002
RM
========
The number of employees of the Group (excluding Directors) at the end of the year were 408.
The Company does not have any employees except the Directors.
Included in the staff costs of the Group is contributions to the Employees Provident Fund of RM623,807.
119
23.
Group
2003
RM
Interest on fixed deposits
Dividend income from quoted investments
24.
(continued)
330,296
6,432
__________
336,728
========
Company
2003
RM
__________
========
2002
RM
__________
========
Tax expense
Group
2003
RM
Malaysian
Current tax expense
Deferred tax expense
12,405,079
33,100
__________
12,438,179
========
Company
2003
RM
4,252,000
__________
4,252,000
========
2002
RM
__________
========
Reconciliation of tax charge
Group
2003
RM
120
Company
2003
RM
2002
RM
40,343,450
=========
15,176,423
=========
(10,973)
=========
Income tax using Malaysian tax rates
Non-deductible expenses
11,296,000
1,142,179
___________
12,438,179
=========
4,250,000
2,000
___________
4,252,000
=========
___________
=========
25.
Basic earnings per ordinary share - Group
The calculation of basic earnings per share is based on the net profit attributable to ordinary shareholders of
RM24,246,533 and the weighted average number of ordinary shares outstanding during the year
of 103,604,619.
Weighted average number of ordinary shares
2003
RM
Issued ordinary shares at beginning of the year
Effect of shares issued in July and September 2003
Weighted average number of ordinary shares
26.
106,000
103,498,619
__________
103,604,619
=========
Dividends – Group and Company
2003
RM
Interim paid:
4.5% per share less tax at 28%
8,100,000
========
The proposed final dividend of 4.5% per share less tax at 28% totalling RM8,100,000 has not been
accounted for in the financial statements.
27.
Segmental information - Group
Segment information is presented in respect of the Group’s business segments. The primary format, business
segments, is based on the Group’s management structure. Inter-segment pricing is determined based on
negotiated terms.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can
be allocated on a reasonable basis. Unallocated items mainly comprise interest-earning assets and revenue,
interest-bearing loans, borrowings and expenses, and corporate assets and expenses.
Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are
expected to be used for more than one period.
121
27.
(continued)
Segmental information - Group (continued)
Business segments
The Group comprises the following main business segments:
-
Development of residential and commercial properties.
Construction
-
Construction of buildings, roads and bridges.
Others
-
Manufacturing and sale of construction materials.
All the business segments are operated solely in Malaysia.
Property
development
2003
RM
Construction
2003
RM
Others
2003
RM
Elimination
2003
RM
Consolidated
2003
RM
78,581,348
___________
78,581,348
59,100,569
___________
59,100,569
5,752,508
6,259,860
___________
12,012,368
(6,259,860)
___________
(6,259,860)
143,434,425
___________
143,434,425
Revenue
External customers
Inter segment sales
Interest income
490,926
___________
143,925,351
=========
Total
Segment results
Unallocated income
(net of expenses)
Operating profit
Income from
investments
Reserve on
consolidation
recognised
Interest expense
Share of profit of
associate and jointly
controlled entities
Profit before taxation
Tax expense
Minority interests
122
23,591,070
=========
12,454,843
=========
749,071
=========
(324,419)
36,470,565
646,434
___________
37,116,999
336,728
2,561,609
(250,484)
578,598
___________
40,343,450
(12,438,179)
(3,658,738)
___________
24,246,533
=========
27.
Segmental information - Group (continued)
Property
development
2003
RM
Segment assets
371,880,257
==========
Construction
2003
RM
53,400,639
==========
Others
2003
RM
Elimination
2003
RM
8,631,047
==========
433,911,943
Long-term investments
Unallocated assets
2,661,756
130,727,692
____________
567,301,391
==========
Total assets
Property
development
2003
RM
Segment liabilities
117,102,468
==========
Construction
2003
RM
Others
2003
RM
Consolidated
2003
RM
34,026,548
=========
3,382,473
=========
154,511,489
Unallocated liabilities
3,392,749
___________
157,904,238
=========
Total liabilities
Capital expenditure
Depreciation
28.
Consolidated
2003
RM
1,065,361
1,316,940
588,517
936,933
7,957
115,854
1,661,835
2,369,727
=========
Capital commitments - Group
2003
RM
Authorised but not contracted for
Contracted but not provided for in the financial statements
8,456,000
1,226,000
__________
9,682,000
========
123
29.
(continued)
Related parties
Controlling related party relationships are as follows:
(i)
Its subsidiaries as disclosed in Note 3;
(ii)
Its associate as disclosed in Note 4;
(iii)
Companies in which Directors have substantial interests; and
(iv)
The Directors of the Company.
Company
2003
RM
2002
RM
Transactions with a subsidiary
Nature of transactions
Dividend income
Management fees receivable
(14,800,000)
(120,000)
========
========
53,849
========
========
15,471
========
15,471
========
42,875
========
48,000
========
Transactions with an associate,
TR Concrete Sdn. Bhd.
Purchase of raw materials
Transactions with companies in which
William Wei How Sieng has interest
HWS Properties Sdn. Bhd.
Rental expenses
Primehold Point Sdn. Bhd.
Watchman and cleaning services
These transactions have been entered into in the normal course of business and have been established under
negotiated terms.
124
30.
Financial instruments
The Board of Directors undertakes on-going reviews to identify, assess and manage key financial risks.
Credit risk
Most of the construction projects undertaken by the Group are government funded. Prior to tendering for
construction contracts, credit evaluation on potential customers is carried out. The management regularly
reviews the credit risks of customers and takes appropriate measures to enhance credit control procedures.
The Group’s exposure to credit risk for property development is low as titles to properties are only transferred
to purchasers upon full settlement.
At balance sheet date, other than an amount of RM25,142,539 receivable from government agencies
constituting 37% of the gross outstanding trade and other receivables of RM68,367,500, there are no
significant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying
amount of each financial asset.
Deposits, cash and bank balances are only placed with licensed banks.
Interest rate risk
The Group’s borrowings comprise term loans with floating interest rates and hire purchase loans with fixed
interest rates. At balance sheet date, the outstanding loans were not material in relation to the shareholders’
funds. The Group has sufficient cash and cash equivalents to repay the outstanding loans in full should there
be adverse fluctuations in interest rates.
Liquidity risk
The Group constantly manages its cash flow to ensure availability of funds to meet its working capital
requirements by maintaining a sufficient level of bank facilities and cash and cash equivalents.
Foreign currency risk
The Group is not exposed to foreign currency risk as its transactions are denominated in Ringgit Malaysia.
125
30.
(continued)
Financial instruments (continued)
Effective interest rates and repricing analysis
In respect of interest-earning financial assets and interest-bearing financial liabilities, the following table
indicates their effective interest rates at the balance sheet date and the periods in which they reprice or
mature, whichever is earlier.
Group
Effective
interest rate
per annum
%
Total
RM
Within
1 year
RM
2003
Financial asset
Fixed deposits
2.50 – 4.00
95,807,595
=========
95,807,595
=========
Financial liability
Term loans
7.00 – 8.00
1,443,882
=========
1,443,882
=========
2.70
52,234,906
=========
52,234,906
=========
Company
2003
Financial asset
Fixed deposits
Fair values
Recognised financial instruments
In respect of cash and cash equivalents, trade and other receivables, trade and other payables, the carrying
amounts approximate fair value due to the relatively short term nature of these financial instruments.
126
30.
Financial instruments (continued)
The aggregate fair values of the other financial assets and liabilities carried on the balance sheet as at
31 December 2003 are shown below:
_________ 2003 ________
Carrying
Fair
amount
value
RM
RM
Group
Financial assets
Long-term:
Quoted shares
Unit trusts
Unquoted shares
Financial liability
Term loans
318,876
155,215
10
_________
474,101
========
411,690
171,880
10
_________
583,580
========
1,443,882
========
1,443,882
========
The fair value of quoted securities is their quoted bid price at the balance sheet date.
Unrecognised financial instruments
There were no unrecognised financial instruments as at 31 December 2003 and 31 December 2002.
31.
Acquisition of subsidiaries
On 25 July 2003, the Company acquired the entire issued and paid-up share capital of Naim Cendera Sdn.
Bhd. for a consideration of RM279,961,920, satisfied by the issuance of shares.
By virtue of the Company’s equity interests in Naim Cendera Sdn. Bhd., the Company is deemed to have
acquired the equity interests of its subsidiaries to the extent Naim Cendera Sdn. Bhd. has interests. The details
of the subsidiaries deemed acquired are disclosed in Note 3 to the financial statements.
The acquisition was accounted for using the acquisition method of accounting.
127
31.
(continued)
Acquisition of subsidiaries (continued)
Effect of acquisition
The acquisition had the following effect on the Group’s assets and liabilities as at 25 July 2003.
RM
Non current assets
Investments
Current assets
Current liabilities
Deferred taxation
Minority shareholders’ interests
Net assets
Purchase consideration
Portion discharged by issuance of shares
Cash paid for acquisition
Cash acquired
Net cash inflow
128
40,840,006
2,271,769
249,426,899
____________
292,538,674
228,846,135
(107,726,655)
(77,047,900)
(25,457,189)
____________
311,153,065
(31,191,145)
____________
279,961,920
(279,961,920)
____________
65,021,695
____________
65,021,695
==========
31.
Acquisition of subsidiaries (continued)
Effect of acquisition (continued)
The effect of the acquisition on the Group’s operating results for the year ended 31 December 2003 is
tabulated below:
Revenue
Gross profit
Other operating income
Distribution cost
Administrative expenses
Operating profit
Reserve on consolidation recognised
Interest expense
Share of profit of an associate
controlled entities
Profit before taxation
Tax expense
Profit after taxation
Minority interests
Pro-forma
RM
Pre-acquisition
RM
Post-acquisition
RM
270,950,749
(179,952,966)
____________
90,997,783
1,232,267
(56,722)
(18,455,341)
____________
73,717,987
1,063,535
2,561,609
(548,091)
____________
76,795,040
407,780
127,025,398
(82,315,696)
____________
44,709,702
662,571
(8,771,285)
____________
36,600,988
726,807
(297,607)
____________
37,030,188
275,537
143,925,351
(97,637,270)
____________
46,288,081
569,696
(56,722)
(9,684,056)
____________
37,116,999
336,728
2,561,609
(250,484)
____________
39,764,852
132,243
784,829
____________
77,987,649
(23,622,461)
____________
54,365,188
(5,881,409)
____________
48,483,779
==========
338,474
____________
37,644,199
(11,184,282)
____________
26,459,917
(2,222,671)
____________
24,237,246
==========
446,355
____________
40,343,450
(12,438,179)
____________
27,905,271
(3,658,738)
____________
24,246,533
==========
The pro-forma results include those of Naim Cendera Sdn. Bhd. and its subsidiaries as if they were part of
the group from 1 January 2003.
32.
Comparative figures
There are no comparative figures for the Group as this is the first set of consolidated financial statements
prepared.
129
ANALYSIS OF
SHAREHOLDINGS
Authorized Share Capital
Issued and Paid-up Share Capital
Class of Shares
Voting Rights
:
:
:
:
RM500,000,000.00 comprising 500,000,000 shares of RM1.00 each
RM250,000,000.00 comprising 250,000,000 shares of RM1.00 each
Ordinary shares of RM1.00 each
One vote per ordinary share
Size of Shareholding
000000001
000000100
000001001
000010001
000100001
012500000
as at 15 April 2004
– 000000099
– 000001000
– 000010000
– 000100000
– 012499999
& Above
No of
Shares Held
% of
Issued Capital
No. of
Shareholders
% of Total
Shareholders
0
331,200
1,698,700
8,769,600
96,549,800
142,650,700
.00
.13
.68
3.51
38.62
57.06
0
361
379
222
129
7
.00
32.88
34.52
20.22
11.75
.63
250,000,000
100.00
1,098
100.00
Substantial Shareholders
Name of Substantial Shareholders
Direct
No. of shares held
%
Indirect
No. of shares held
Island Harvests Sdn. Bhd.
Lembah Rakyat Sdn. Bhd.
Lambaian Kukuh Sdn. Bhd.
Tapak Beringin Sdn. Bhd.
Employees Provident Fund Board
31,769,700
28,297,850
26,448,800
19,714,650
14,406,900
13,150,000
12,939,100
12.71
11.32
10.58
7.89
5.76
5.26
5.18
Nil
61,177,100 *
Nil
Nil
Nil
40,875,700 #
3,088,400
%
24.47
16.35
1.24
* Deemed interested by virtue of his substantial shareholding in Island Harvests Sdn. Bhd., Lambaian Kukuh Sdn. Bhd., Hasmi &
Associates Management Sdn. Bhd. and Custodev Sdn. Bhd.
# Deemed interested by virtue of his substantial shareholding in Lembah Rakyat Sdn. Bhd., Tapak Peringin Sdn. Bhd. and
Custodev Sdn. Bhd.
Held 1,024,000 shares through Nomura Asset Management, 1,328,400 shares through Rashid Hussain Asset Management,
350,000 through Amanah SSCM Asset Management and 386,000 shares through Alliance Merchant Bank.
Top Thirty Shareholders
No.
Name of Shareholder
No. of Shares Held
% of Shareholding
1
Island Harvests Sdn. Bhd.
31,769,700
12.71
2
28,297,850
11.32
3
Lembah Rakyat Sdn. Bhd.
26,448,800
10.58
4
Lambaian Kukuh Sdn. Bhd.
19,714,650
7.89
5
Tapak Beringin Sdn. Bhd.
14,406,900
5.76
6
13,150,000
5.26
7
Employees Provident Fund Board
12,939,100
5.18
130
No.
Name of Shareholder
No. of Shares Held
% of Shareholding
8
Hasmi & Associates Management Sdn. Bhd.
9,672,750
3.87
9
HWS Properties Sdn. Bhd.
8,597,550
3.44
10
HSBC Nominees (Asing) Sdn. Bhd.
(Universities Superannuation Scheme Limited)
5,400,000
2.16
11
Citicorp Nominees (Asing) Sdn. Bhd.
(AIG International Funds-Acorns of Asia Balanced Fund)
2,985,000
1.19
12
BHLB Trustee Berhad (Prugrowth Fund)
2,708,000
1.08
13
Citicorp Nominees (Tempatan) Sdn. Bhd.
(Prudential Assurance Malaysia Berhad Prulink Eqty Fund)
2,432,800
.97
14
(The Malaysia Fund Incorporated)
2,311,000
.92
15
Mayban Nominees (Tempatan) Sdn. Bhd.
(RHB Dynamic Fund)
2,252,800
.90
16
(American International Assurance Co. Ltd AIA Reg Eqty Fd)
2,010,000
.80
17
(Shell Contributory Pension Fund)
1,880,100
.75
18
Yayasan Sarawak
1,750,000
.70
19
Cartaban Nominees (Asing) Sdn. Bhd.
(National Investment Trust Company Malaysia Fund)
1,474,000
.59
20
(Stichting Bedri Jespensioenfonds)
1,443,700
.58
21
RHB Nominees (Tempatan) Sdn. Bhd.
(Employees Provident Fund Board)
1,328,400
.53
22
HSBC Nominees (Asing) Sdn. Bhd. (Fidelity Funds Malaysia)
1,123,800
.45
23
(Uni Em Fernost Treuhandkonto, Luxembourg)
1,100,000
.44
24
Citicorp Nominees (Tempatan) Sdn. Bhd. (PAR Fund)
1,086,900
.43
25
AMMB Nominees (Tempatan) Sdn. Bhd
(Tabung Baitumal Sarawak)
1,080,000
.43
26
(London Pensions Fund Authority)
1,071,700
.43
27
(Genesis Malaysia Maju Fund Limited)
1,000,000
.40
28
(Dresdner RCM Little Dragons Fund Limited)
1,000,000
.40
29
(Baillie Gifford Pacific Fund)
1,000,000
.40
30
Pelita Dinamik Sdn. Bhd.
1,000,000
.40
131
ANALYSIS OF SHAREHOLDINGS
as at 15 April 2004 (continued)
Directors’ Direct and Indirect Interest in the Company
Name of Substantial Shareholders
Kueh Hoi Chuang
Direct
No. of shares held
%
13,150,000
28,297,850
135,000
160,000
144,100
Nil
Nil
25,000
100,000
5.26
11.32
0.054
0.064
0.058
Nil
Nil
0.01
0.04
Indirect
No. of shares held
40,875,700 #
61,177,100 *
Nil
8,597,550
Nil
Nil
Nil
Nil
Nil
%
16.35
24.47
3.44
-
* Deemed interested by virtue of his substantial shareholding in Island Harvests Sdn. Bhd., Lambaian Kukuh Sdn. Bhd., Hasmi &
Associates Management Sdn. Bhd. and Custodev Sdn. Bhd.
# Deemed interested by virtue of his substantial shareholding in Lembah Rakyat Sdn. Bhd., Tapak Peringin Sdn. Bhd. and
Custodev Sdn. Bhd.
132
LIST OF PROPERTIES
Lot No/ Location
as at 31 December 2003
Description
Date of Acquisition /
Lease Expiring Date
Land Area /
(Built up area)
Sq. Meter
At Cost/
Net Book Value
RM
Lot 107, Block 2,
Samarahan Land District,
Samarahan
Vacant Land
10.12.1996
Perpetuity
9,100
81,228
Lot 109, Block 2,
Samarahan
Vacant Land
15.01.1997
Perpetuity
12,900
115,147
Lot 106, Block 2,
Samarahan
Vacant Land
29.03.1997
Perpetuity
1,610
18,375
Lot 431, Kuala Baram Land
District, Miri
Land for
Development
20.07.1995
Expiring
19.07.2055
415,141
10,258,000
Lot 772, Kuala Baram Land
District, Miri
Land for
Development
21.08.1997
Expiring
20.08.2057
1,770,036
51,870,000
+ Lot 800, Block 10
Kuala Baram Land District,
Miri
Land for
Development
21.08.1997
Expiring
20.08.2057
1,890,067
56,131,200
#
Lot 5156, Block 10
Miri
Land for
Development
21.08.1997
Expiring
20.08.2057
526,474
17,052,000
Lot 4281, Block 10,
Miri
Land for
Development
20.07.1995
Expiring
19.07.2055
1,260,045
52,097,200
PROPERTIES UNDER LAND
HELD FOR DEVELOPMENT
Freehold
Long Term Leasehold
*
*
+
#
Lot 431 is new lot number for Lot 430
133
LIST OF PROPERTIES
as at 31 December 2003 (continued)
Lot No/ Location
Description
Lot 5451, Block 10,
Miri
Land for
Development
21.08.1997
Expiring
19.07.2055
1,199,936
Lot 2280, Block 1, Samarahan
Land District, Samarahan
Land for
Development
09.03.2000
Expiring
19.03.2060
59,228
Land for
Development
09.03.2000
Expiring
19.03.2060
1,578
Land for
Development
09.03.2000
Expiring
19.03.2060
4,290
Land for
Development
09.03.2000
Expiring
19.03.2060
17,795
Land for
Development
08.01.2001
Expiring
07.01.2061
4,699
Land for
Development
08.01.2001
Expiring
07.01.2061
44,574
Land for
Development
08.01.2001
Expiring
07.01.2061
9,628
Land for
Development
05.03.2002
Expiring
04.03.2062
29,021
Land for
Development
03.01.2003
Expiring
02.01.2063
664,072
^ Lot 2801, Block 1, Samarahan
Land for
Development
09.03.2000
Expiring
08.03.2060
3,282
^
134
Lease Expiring Date
Land Area /
At Cost/
(Built up area) Net Book Value
Sq. Meter
RM
32,468,088
25,708,817
Lot No/ Location
Description
Lease Expiring Date
Vacant land
19.10.1998
Expiring
14.10.2052
Land Area /
At Cost/
Sq. Meter
RM
Short Term Leasehold
Lot 61, Section 41, Kuching Land
District, Kuching
6,140
1,989,828
Sub-total
247,789,882
PROPERTIES UNDER PROPERTY
PLANT & EQUIPMENT
Long Term Leasehold
Lot 23, Block 34, Kemena Land
District, Miri
Land for
Development
13.02.2001
Expiring
12.02.2060
30,601
14,743,345
Industrial Land
and Building
(Age: 6 Years)
08.06.1997
Expiring
19.07.2055
10,118
(1,297)
1,255,862
Sublot 182, Lot 1536, Block 6
Kuala Baram District, Miri
Land and
Buildings
(Age: 3 Years)
12.03.2001
Expiring
19.07.2055
49,292
(493)
281,406
Land and
Buildings
(Age: 3 Years)
12.03.2001
Expiring
19.07.2055
50,871
(509)
264,178
Vacant Land
17.06.2002
Expiring
19.07.2055
47,593
63,568
Vacant Land
17.06.2002
Expiring
19.07.2055
47,593
63,568
Lot 3162, Block 10
Kuching Central Land District
Vacant Land
24.07.02
Expiring
20.08.2062
12,355
1,141,849
Lot 3161, Block 10
Kuching Central Land District
Vacant Land
24.07.02
Expiring
20.08.2062
7,143
549,648
~ Lot 431, Block 6, Kuala Baram
Land District, Miri
~
135
LIST OF PROPERTIES
136
as at 31 December 2003 (continued)
Lot No/ Location
Description
Lease Expiring Date
Land Area /
At Cost/
Sq. Meter
RM
Lot 2949-3-2, Apartment B3,
Westmoore Apartment, Kuching
Apartment
(Age: 8 years)
29.06.2002
Expiring
11.04.2055
(141)
263,700
Lot 2679, Block 10,
Wisma Naim, Jalan Rock,
Kuching Town Land District,
Kuching
Office Building
(Age: 8 years)
31.07.2000
Expiring
11.04.2055
(568)
1,935,190
Sublot 5747, Lot 4279, Block 10,
Kuala Baram Land District, Miri
Tulip
Showhouse
(Age:5 years)
15.08.2000
Expiring
30.09.2055
299
(500)
213,025
Rose
Showhouse
(Age: 5 Years)
15.08.2000
Expiring
30.09.2055
90
(500)
114,414
Daisy
Showhouse
(Age: 5 Years)
15.08.2000
Expiring
30.09.2055
112
(680)
132,735
Lily
Showhouse
(Age: 5 Years)
15.08.2000
Expiring
30.08.2055
90
(525)
105,343
Melati
Showhouse
(Age: 7 Years)
31.08.2000
Expiring
28.06.2055
75
(350)
88,348
Melati
Showhouse
(Age: 7 Years)
31.08.2000
Expiring
28.06.2055
75
(350)
88,348
Jasmine
Showhouse
(Age: 7 Years)
31.08.2000
Expiring
28.06.2055
84
(350)
110,428
Jasmine
Showhouse
(Age: 7 Years)
31.08.2000
Expiring
28.06.2055
84
(350)
110,428
Miri Town Land District, Miri
Showhouse
(Age: 6 Years)
31.08.2000
Expiring
28.06.2055
110
(350)
67,099
Miri Town Land District, Miri
Showhouse
(Age: 6 Years)
31.08.2000
Expiring
28.06.2055
69
(350)
67,099
Lot No/ Location
Description
Lease Expiring Date
Apartment /
Site Office
(Age: 1 Year)
31.12.2003
Expirig
30.12.2057
Land District
Kuching Central Land District,
Eastmoore, Kuching
Land Area /
At Cost/
Sq. Meter RM
(140)
56,124
Apartment / Site Office 31.12.2003
(Age: 1 Year)
Expiring 30.12.2057
(98)
60,956
Office Building
(Age: 3 Years)
12.12.2001
Expiring
13.08.2063
270
(464)
778,660
Lot 314, Block 10, Kuching
Central Land District, Kuching
Land for
Development
12.06.02
Expiring
11.06.2038
5,787
2,185,724
Lot 838, Block 10, Kuching
Central Land District, Kuching
Land and
Buildings
(Age: 45 Years)
17.12.2002
Expiring
16.12.2038
2,060
(112)
736,838
Lot 885, Block 9, Miri Concession
Land District, Miri
4 Storey
Shophouses
(Age: 8 Years)
11.09.1997
Expiring
30.09.2052
110
(698)
528,843
Lot 889, Block 9, Miri Concession
Land District, Miri
Office Building
(Age: 9 Years)
27.01.1999
Expiring
30.09.2052
185
(740)
1,127,666
Sub-total
27,134,389
Total
274,924,271
Short Term Leasehold
137
NOTICE OF
ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the 2nd Annual General Meeting of Members of NAIM CENDERA HOLDINGS BERHAD
will be held at Holiday Inn Resort Damai Lagoon, Jalan Teluk Penyuk, Santubong, Kuching, Sarawak on Monday, 24th May
2004 at 11.00 a.m. for the following purposes:
ORDINARY BUSINESS
1. Adoption of Financial Statements
To receive and adopt the audited financial statements and reports of Directors and
Auditors for the financial year ended 31st December 2003.
ORDINARY RESOLUTION 1
2. Approval of Final Dividend
To approve a final dividend of 4.5 sen per share less 28% Income Tax for the year
ended 31st December 2003.
3. Approval of Directors’Fees
To approve Directors’Fees in respect of the financial year ended 31st December 2003.
4. Re-Election of Directors
In accordance with Article 85 of the Company’s Articles of Association, the following
Directors retire by rotation from the Board and being eligible, offer themselves for
re-election.
5. Re-Appointment of Auditors
To re-appoint Messrs. KPMG as Auditors and to authorise the Directors to fix their
remuneration.
SPECIAL BUSINESS
To consider and, if thought fit, to pass the following as Ordinary Resolutions:6. Proposed Shareholders’ Ratification and Proposed Shareholders’ Mandate for
Recurrent Related Party Transactions of a Revenue or Trading Nature ("Proposed
Shareholders’ Ratification" and " Proposed Shareholders’ Mandate")
"THAT approval be and is hereby given to the Company and its subsidiaries to enter
into any of the category of recurrent related party transactions of a revenue or trading
nature as set out in Paragraph 2.1.4 of the Circular to Shareholders dated 30th April
2004 with the specific related parties mentioned therein which are necessary for the
Naim Group’s day-to-day operations subject further to the following :(a) the transactions are in the ordinary course of business and are on normal
commercial terms which are not more favourable to the related parties than those
available to the public and not to the detriment of the minority shareholders; and
(b) disclosure is made in the annual report of the aggregate value of transactions
conducted pursuant to the Proposed Shareholders’Ratification during the financial
year; amongst others, based on the following information:(i) the type of the recurrent transactions made; and
(ii) the names of the related parties involved in each type of the recurrent
transactions made and their relationship with the listed issuer
1
AND THAT such approval shall continue to be in force until :(a) the conclusion of the next Annual General Meeting ("AGM") of the Company; or
(b) the expiration of the period within which the next AGM of the Company
subsequent to the date it is required to be held pursuant to Section 143 (1) of the
Companies Act, 1965 ("the Act") (but shall not extend to such extension as may be
allowed pursuant to Section 143 (2) of the Act); or
(c) revoked or varied by resolution passed by the shareholders in general meeting;
whichever is the earlier;
AND THAT for the avoidance of doubt, all such transactions entered into by the
Company and its subsidiaries from the date of listing until the forthcoming AGM as
outlined in Paragraph 2.1.4 of the Circular to Shareholders dated 30th April 2004 be
and are hereby approved and ratified AND THAT the Directors of the Company be
authorized to complete and do all such acts and things as they may consider
expedient or necessary to give effect to the specified Proposed Shareholders’Mandate
for the period from this AGM to the next AGM."
7. Proposed Share Buy-Back
"THAT subject always to the Companies Act, 1965 ("the Act"), rules, regulations and
orders made pursuant to the Act, provisions of the Company’s Memorandum and
Articles of Association and the Bursa Malaysia Securities Berhad ("Bursa Malaysia")
Listing Requirements and any other relevant authority, the Directors of the Company
be and are hereby unconditionally and generally authorised to purchase and hold on
the market of the Bursa Malaysia such number of ordinary shares of RM1.00 each
("Shares") in the Company ("Proposed Share Buy-Back") as may be determined by the
Directors of the Company ("Directors") from time to time through the Bursa Malaysia
upon such terms and conditions as the Directors may deem fit, necessary and
expedient in the interest of the Company provided that the total aggregate number of
Shares purchased and/or held or to be purchased and/or held pursuant to this
resolution shall not exceed 25,000,00 Shares representing approximately ten percent
(10%) of the total issued and paid-up share capital of 250,000,000 ordinary shares of
RM1.00 each of the Company as at 31st March 2004 and an amount not exceeding
RM30 million, being an amount not exceeding the total of the Company's latest
unaudited net cash resource of RM55.7million as at 31st March 2004, be allocated by
the Company for the Proposed Share Buy-Back AND THAT, such Shares purchased are
to be retained as treasury shares and distributed as dividends and/or resold on the
market of the Bursa Malaysia, or subsequently may be cancelled AND THAT the
Directors be and are hereby authorised and empowered to do all acts and things and
to take all such steps and to enter into and execute all commitments, transactions,
deeds, agreements, arrangements, undertakings, indemnities, transfers, assignments
and/or guarantees as they may deem fit, necessary, expedient and/or appropriate in
order to implement, finalise and give full effect to the Proposed Share Buy-Back with
full powers to assent to any conditions, modifications, revaluations, variations and/or
amendments, as may be required or imposed by any relevant authority or authorities
and/or any amendments, variations and/or modifications as they may deem fit,
necessary, expedient and/or appropriate in the best interest of the Company as may be
approved by any relevant authority or authorities if such approval(s) are required AND
FURTHER THAT the authority hereby given shall commence immediately upon
passing of this ordinary resolution and shall continue in force until :(a) the conclusion of the first annual general meeting at which time it shall lapse
unless by ordinary resolution passed at that meeting, the authority is renewed,
either unconditionally or subject to conditions;
(b) the expiration of the period within which the next annual general meeting after
that date is required by law to be held;
2
(c) revoked or varied by ordinary resolution passed by the shareholders in general
meeting;
whichever occurs first, in accordance with the provisions of the guidelines issued by
Bursa Malaysia or any other relevant authorities."
8. Authority to issue shares pursuant to Section 132D of the Companies Act, 1965
"That pursuant to Section 132D of the Companies Act, 1965 and subject always of the
approval of the relevant authorities, the Directors be and are hereby empowered to
issue shares in the Company from time to time and upon such terms and conditions
and for such purposes as the Directors may deem fit, provided that the aggregate
number of shares issued pursuant to this resolution does not exceed 10% of the issued
share capital of the Company for the time being and that such authority shall continue
in force until the conclusion of the next Annual General Meeting of the Company.
BY ORDER OF THE BOARD
KHO TECK HOCK (MIA 5836)
BONG SIU LIAN (MAICSA 7002221)
Company Secretaries
Kuching, Sarawak
Dated this 30th April 2004
NOTES:
1. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Act shall not apply to the Company.
2. To be valid this form duly completed must be deposited at the Registered Office of the Company at 9th Floor, Wisma Naim, 2 1/2 Mile
Jalan Rock, 93200 Kuching, Sarawak not less than forty-eight (48) hours before the time set for holding the meeting or any adjournment
thereof.
3. A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meeting provided that the provisions of
Section 149(1)(c) of the Act are complied with.
4. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportions of his holdings
to be represented by each proxy.
5. If the appointer is a corporation, this form must be executed under its common seal or under the hand of an officer or attorney duly
authorised.
6. Please note that the interested directors, interested major shareholders or interested persons connected with a director or major share
holder; and where it involves the interest of an interested person connected with a director or major shareholder, such director or major
shareholder, must not vote in respect of their direct and/or indirect shareholdings on the resolution approving the Proposed Shareholders’
Ratification and Proposed Shareholders’Mandate.
Explanatory Notes on Special Business
a) Ordinary Resolution proposed under item 6
This proposed resolution, if approved, will approve and ratify related party transactions entered into by the Company
and its subsidiaries from the date of listing until the forthcoming Annual General Meeting and authorise the Company
and its subsidiaries to transact with the mandated related parties for the period from this Annual General Meeting to
the next Annual General Meeting. Please refer to Circular to Shareholders dated 30th April 2004.
b) Ordinary Resolution proposed under item 7
The proposed resolution, if passed, will empower the Directors of the Company from the date of the above Annual
General Meeting, authority to purchase and/or held or to be purchased provided that the total aggregate number of
shares purchased shall not exceed 10% of the total issued and paid-up share capital of the Company. This authority
will unless revoked or varied by the Company in General Meeting expire at the next Annual General Meeting of the
Company. Please refer to Circular to Shareholders dated 30th April 2004.
3
c)
Ordinary Resolution proposed under item 8
This proposed resolution, if passed, will empower the Directors of the Company from the date of the above Annual
General Meeting, authority to issue and allot Ordinary Shares from the unissued capital of the Company up to an
aggregate amount not exceeding 10% of the issued share capital of the Company for the time being, for such
purposes as the Directors consider would be in the interest of the Company. This authority will unless revoked or
varied by the Company in General Meeting, expire at the next Annual General Meeting of the Company.
Statement accompanying Notice of Annual General Meeting
1. THE DIRECTORS WHO ARE STANDING FOR RE-ELECTION
a) The Directors who are standing for re-election at the 2nd Annual General Meeting of the Company are as follows:Datuk Abdul Hamed Bin Sepawi
b) Further details of the above named Directors are available on pages 34 to 39 and their securities holdings on page 132
of the 2003 Annual Report.
c) The Board met 3 times during the financial year ended 31st December 2003. Details of attendance at Board Meetings
during the year as set out in page 49 of the 2003 Annual Report.
2. DATE, TIME AND PLACE OF THE BOARD MEETINGS
Details of Board meetings held are as follows:Date
Time
Friday, 25th July 2003
5.30 p.m.
Monday, 28th July 2003
3.00 p.m.
Thursday, 13th November 2003
10.00 a.m.
All Board meetings were held at Naim’s Conference Room 9th Floor Wisma Naim, 2 1/2 Mile Jalan Rock, 93200 Kuching,
Sarawak.
NOTICE OF DIVIDEND ENTITLEMENT
NOTICE IS ALSO HEREBY GIVEN that the Final Dividend of 4.5 sen per share less 28% Income Tax in respect of the
financial year ended 31st December 2003, if approved at the 2nd Annual General Meeting, will be payable on 16th June
2004 to depositors listed in the Records of Depositors on 31st May 2004.
A Depositor shall qualify for entitlement only in respect of:(a) Shares transferred into the Depositor’s Securities Account before 4.00 p.m. on 31st May 2004 in respect of ordinary
transfers; and
(b)Shares bought on Bursa Malaysia on a cum entitlement basis according to the Rules of Bursa Malaysia.
By Order of the Board,
KHO TECK HOCK (MIA 5836)
BONG SIU LIAN (MAICSA 7002221)
Company Secretaries
Kuching, Sarawak
Dated this 30th day of April 2004
4
To / Kepada : Naim Cendara Holdings Berhad
Please send me a copy of the 2003 Annual Report in Bahasa Malaysia :
Sila hantar kepada saya / kami senaskah Laporan Tahunan 2003 dalam Bahasa Malaysia :
Name of Shareholder /
Nama Pemegang Saham :
Address / Alamat :
Signature of Shareholder /
Tandatangan Pemegang Saham :
1. Fold here / Lipat di sini
STAMP
The Company Secretary
9th Floor, Wisma Naim,
2 1/2 Mile Jalan Rock,
93200 Kuching,
Sarawak.
2. Fold here / Lipat di sini
FORM OF PROXY
I/We
NRIC No
(FULLNAME AS PER NRIC IN BLOCK CAPITAL)
of
(FULLADDRESS)
being a member of NAIM CENDERA HOLDINGS BERHAD, hereby appoint
(FULLNAME AS PER NRIC IN BLOCK CAPITAL)
of
(FULLADDRESS)
or failing him/her the Chairman of the meeting as my/our proxy/proxies to vote for me/us on my/our behalf at the 2nd
Annual General Meeting of the Company to be held at Holiday Inn Resort Damai Lagoon, Jalan Teluk Penyuk, Kuching,
Sarawak, Malaysia on Monday, 24th May 2004 at 11.00 a.m. or any adjournment thereof, in the manner
indicated below:-
No Resolutions
1
To receive the audited financial statements and the reports of Directors and
Auditors for the financial year ended 31st December 2003
2
To approve a final dividend of 4.5 sen per share less 28% Income Tax for
the year ended 31 st December 2003
3
To approve Directors’fees
4
To reappoint Datuk Abdul Hamed Bin Sepawi as Director
5
To reappoint Datuk Hasmi Bin Hasnan as Director
6
To reappoint Abang Hasni Bin Abang Hasnan as Director
7
To reappoint Messrs KPMG as Auditors and to authorize the Directors to fix
their remuneration
8
To approve the Proposed Shareholders’ Ratification and Proposed
Shareholders’Mandate for Recurrent Related Party Transactions
9
To approve the Proposed Share Buy-Back
FOR
AGAINST
10 To authorize the issuance of up to 10% of the issued share capital of the
Company
(Please indicate with an "X" in the spaces above how you wish your votes to be casted on the resolution specified in
the Notice of Meeting. If no specific direction as to the voting is indicated, the proxy/proxies will vote or abstain from
voting as he/she/they think(s) fit.)
Number of shares held :
Dated this
__day of
2004.
__
Signature of Shareholder(s)/Common Seal
Notes:1. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Act shall not apply to the Company.
2. To be valid this form duly completed must be deposited at the Registered Office of the Company at 9th Floor, Wisma Naim, 2 1/2 Mile Jalan Rock,
93200 Kuching, Sarawak not less than forty-eight (48) hours before the time set for holding the meeting or any adjournment thereof.
3. A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meeting provided that the provisions of Section 149(1)(c)
of the Act are complied with.
4. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportions of his holdings to be
represented by each proxy.
5. If the appointer is a corporation, this form must be executed under its common seal or under the hand of an officer or attorney duly authorised.
6. Please note that the interested directors, interested major shareholders or interested persons connected with a director or major shareholder; and where
it involves the interest of an interested person connected with a director or major shareholder, such director or major shareholder, must not vote in
respect of their direct and/or indirect shareholdings on the resolution approving the Proposed Shareholders’Ratification and Proposed Shareholders’
Mandate.
1. Fold here
STAMP
The Company Secretary
9th Floor, Wisma Naim,
2 1/2 Mile Jalan Rock,
93200 Kuching,
Sarawak.
2. Fold here
From where we began...
Annual Report 1998
NAIM CENDERA SDN BHD
Annual Report 1999
Annual Report 2000
Annual Report 2001
SCCI Award winning
Annual Report 2002
(Non-public listed companies category)
Annual Report 2003
NAIM CENDERA HOLDINGS BHD
www.naimcendera.com
Wisma Naim
Company No.585467-M
Registered and Head Office
9th Floor Wisma Naim
2 1/2 Mile, Rock Road,
Tel : 082-411667
Fax : 082-233667
E-mail: cendera@po.jaring.my

Company No. 585467-M (Incorporated in

Transcription

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